Sales tax and VAT terms for global finance teams
A comprehensive glossary of expert definitions and practical insights designed specifically for modern software and SaaS companies.
Whether you’re dealing with bundled transactions, trying to understand nexus thresholds, or managing cross-border digital service taxes, use this glossary to stay compliant and up to date while scaling globally.
Terms
Terms
Reverse charge
The reverse charge mechanism shifts the responsibility for reporting and paying tax from the supplier to the recipient of goods or services. This system is common in non-US countries and typically applies in cross-border transactions, business-to-business services, and specific industry sectors.
The reverse charge simplifies tax compliance for international transactions while ensuring appropriate tax collection within each jurisdiction. Businesses must carefully document transactions subject to a reverse charge to maintain proper compliance records.A mechanism shifting tax reporting and payment responsibility from the supplier to the recipient. Common in international transactions and B2B services, requiring careful documentation and compliance procedures.
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