How to get a VAT refund
Most businesses who incur VAT in connection with their activities in an EU country where they do not habitually supply goods/services (and so are not required to register for VAT) are nevertheless entitled to deduct that VAT. This ‘deduction’ is made by means of a refund from the EU country where they paid the VAT.
To avoid potential language problems, claimants send an electronic refund claim to their own national tax authorities – who then forward it to the EU country where the claimant incurred the VAT (once they have confirmed the claimant's identity and VAT identification number, and the validity of their claim).
Procedure to follow
EU businesses should request the VAT refund by using the following procedure :
1) Electronic portal
To obtain a foreign VAT refund, a company shall address an electronic refund application via the electronic portal set up by its own Member State. This electronic application shall contain information regarding the company (name and full address, email, VAT number, bank account details, etc.) as well as information regarding invoices (name and full address of the supplier, VAT number with prefix, date and number of the invoice, taxable amount, amount of deductible VAT, nature of the goods and services, etc.).
2) No more submission of the original invoices
The company is not required to submit original invoices. The Member State to which the reclaim was addressed may however request the company to send by electronic means a copy of the invoices for which the taxable amount is EUR 1.000 or more (€ 250 if invoices concern fuel).
3) No more submission of the Certificate of VAT Status.
The company is not required to submit a Certificate of VAT Status. The VAT status of the company as well as the validity of its VAT number will be directly confirmed by electronic means by its own Member (where the company is established) to the concerned Member state.
Increased deadline to introduce reclaims
VAT refund shall be authorized at the latest until September 30 of the calendar year following the refund period. In others words, a foreign company incurring German VAT during the year 2022 could request for the reimbursement towards the German VAT authorities via the electronic portal from its Member state until September 30, 2023.
Reduced period to notify the decision
The Member State of refund shall notify the applicant of its decision to approve or refuse the refund application within four months of its reception. Refunds of the approved amount shall be paid by the Member state at the latest within 10 working days. If not, interest shall be due.
The Expert's eye
If your company is established in a European country and does not have a VAT number in that country, it will have to apply for a VAT refund electronically from its country of residence in the form and within the time limits required by the Directive 2008/9. According to a report published by the European Commission, tax administrations receive around 700,000 applications annually. The electronic procedure may seem simple enough at first glance. But beware because some tax administrations (e.g. Germany, Czech Republic, Romania, etc.) do not like to refund VAT to foreign companies and will want to use any means to reject your request. It is not for nothing that many disputes end up before the Court of Justice on this subject.
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