What does reverse charge mean in affiliate marketing?

Reverse Charge in Affiliate Marketing
Reverse charge is a VAT mechanism where the responsibility for reporting and paying value-added tax shifts from the service provider to the service recipient. In affiliate marketing, this typically applies to cross-border transactions within the European Union or in certain international setups. Instead of the provider charging VAT, the customer or partner is obligated to calculate and remit the tax in their own country.

Example 1:
If selecdoo (based in Switzerland) invoices a customer in Germany, the reverse charge procedure applies because Switzerland is not part of the EU. Selecdoo does not include German VAT on the invoice. Instead, the German customer is required to calculate and pay the VAT directly in Germany.

Example 2:
If selecdoo issues a commission statement (credit note) to a publisher in Germany, the reverse charge mechanism is also applied. The credit note is issued without VAT, and the publisher must declare and pay the VAT in their own country.

At selecdoo, the reverse charge procedure is consistently applied to ensure proper tax handling for cross-border services while minimizing administrative workload for all parties involved. This is especially important in affiliate marketing, where international partnerships are common.