Current rules on VAT reclaiming within the European Union
Doing business within the European Union means purchasing goods in different countries than where your company is established. Along with these expenses, value-added tax can be charged on purchase invoices for some goods or services, according to the rates and rules in force in the Member State where the goods or services are purchased.
Within this frame, the so-called 8th Directive, or Directive 2008/9/EC, allows EU established businesses to claim their VAT in the Member States where VAT was paid. The 8th Directive harmonizes the rules of reclaiming foreign VAT within a set time frame and through simplified online refund forms.
Who can apply?
All businesses established in a EU country are, in principle, eligible to VAT refund under the 8th Directive. In practice, other conditions apply:
- your business must not have a fixed establishment in the Country where VAT refund is claimed
- your business must be registered for VAT in your Country of establishment
- your business has not carried out taxable transactions, or only has only made reverse charge transactions, within the territory of the Member State of refund and for the reclaiming period.
Businesses established outside of the EU are also entitled to VAT refund, under conditions set by the 13th Directive (Directive 86/560/EEC). See here for more info.
How much VAT can I get refunded and on which products?
VAT can be refunded on goods and services that give a right to deduction in the Country of refund. There are dissimilarities within the Member States about refundable VAT on certain expenses, in particular when it comes to costs related to business trips (hotels, restaurants, car rentals).
VAT can also be refunded partially, according to the type of expenses and to the Country of refund.
Contact us to get full analysis of your situation.
What is the deadline?
The main deadline for VAT refund claims is September 30th, which concerns claims for period from January 1st to December 31st of the year before.
However, tax return claims can be filed throughout the year for shorter periods:
- 3 months (quarterly claims),
- 6 months (admitted only in some Countries),
- yearly claims, including all 12 months of the year.
The possibility to send claims for periods different than yearly applications depends mostly on the amount of the value-added tax to recover (mostly 400 € for quarterly or half-year refund applications; 50 € for yearly refunds).
What is the procedure?
To file a vat refund application, companies must submit refund forms electronically, via the tax portal of their own Member State of establishment. The VAT return demand will then be transferred to the authorities of the Member State of refund. It can also be requested to provide copies or original documents and/or invoices.
Once the TAX refund requests are submitted via your company’s national tax portal, the VAT return procedure can start on the level of the recipient foreign national tax authority, that will carry out all due checks in order to refund the returnable tax rate to the claimant.
The tax authority can request to claimants additional information or documents in order to accept the claim; or it could reject it in case any of the requirements about the company or about the invoices are not met.
The advantages of reclaiming VAT with a refund specialist
As it can be difficult to evaluate the eligibility of a company for a refund of VAT or if purchase invoices are acceptable for claiming a tax refund, you can always count on a refund specialist to submit your TAX refund applications.
In this case, experts of claiming procedures in all 27 Countries will check your situation, submit and follow your applications until you get your TAX refund.
Optimize your chances to obtain a reimbursement of value-added taxes
The service of an expert allows you to maximize your chances to get a refund without a hitch.
You will be assisted by specialists, knowledgeable in both the EU country where you are established and where you claim your VAT. They will fill VAT refund forms in the most appropriate way and make sure that all the needed supporting documentation is attached to your demands.
Your VAT refund specialist will also check the status of your applications and reply to the national tax authority according to the rules of tax refund under 8th Directive so to ensure that they will pay back your VAT.
Let a specialist deal with tax offices requests
In case of requests of information during the refund process, your VAT expert will help you to provide the needed documents and information in the most efficient way and by set deadlines.
Improve your cash flow thanks to pre-financing services
One of the advantages of a professional TAX refund service is the possibility of receiving your VAT before the return process event starts.
Upon evaluation of your situation and VAT invoices of goods and services purchased abroad our VAT specialists will transfer to your company the refundable VAT amounts according to the frequency that suits most your need for liquidity, with weekly, monthly or quarterly payments.