Some of your purchases, costs or expenses are subject to foreign VAT. Can you reclaim this VAT? How do I apply for a VAT refund in each country? Are there any deadlines for these VAT refund applications? What forms and supporting documents do I need? When should I appoint a fiscal representative?
A quick guide for companies.
VAT refunds in Europe: the conditions
So your company wants to recover VAT in an EU Member State? Ask yourself two questions.
Does your company carry out taxable operations in that state?
You can only claim a VAT refund in an EU Member State if you do not carry out taxable transactions in that State.
If you carry out taxable transactions in that State, you must register for VAT and the VAT incurred on your purchases can be deducted on the VAT return you filein line with the regulations for the State in question.
- To see if your operations are liable for VAT in a particular country, try our VAT simulator or contact a consultant.
Are the operations concerned « deductible » ?
The right to a VAT refund is only available for transactions considered “deductible” in the EU Member State where the refund is requested.
Please note: deduction exclusions that exist in one Member State may not exist in another.
France, for example, does not allow VAT deduction on passenger cars, whereas Germany does. France allows VAT refunds on restaurant expenses, which is not the case in Belgium.
The different categories of expenses that may apply to VAT refunds are the following:
- VAT recovery on vehicles and vehicle-related expenses (road tolls, fuel etc.) and car rentals or other means of transport, taxi and public transport expenses (see our industry guide:VAT and transport)
- VAT on entrance fees for salons, trade fairs & shows
- VAT refunds on accommodation
- Food, beverages and catering
- Miscellaneous.
Working out recoverable costs can therefore be rather complex. Contact a consultant.
How do I claim a VAT refund in Europe?
The arrangements differ depending on whether or not your company is established in the European Union – i.e. whether or not it has a legal structure there.
If your company is established in the European Union:
The Intra-Community mechanism for VAT refunds is specified by Directive 2008/9/EC. An electronic process was introduced on 1st January 2010 to speed up reimbursement.
- It’s worth using a tax representative who is fully conversant with the conditions for deductions in each Member State and who can, if necessary, follow up or respond to requests from the tax authorities in the Member States in question.
If your company is established outside the European Union :
You will be entitled to a refund for any VAT you pay in the European Union if reciprocal agreements exist between your country and the relevant EU countries.
- You are required to appoint a fiscal representative established in the countries in question to apply for your refund.
What are the deadlines for your VAT refunds?
Deadlines and minimums for your returns:
Annual VAT returns must be submitted by 30 September of the year following the expenditure. These applications may also be submitted every quarter.
There are minimum amounts for submitting a VAT refund request: €400 for a period of 3 months to less than a year, and €50 for a calendar year.
VAT instruction & payment deadlines:
The Member State where you are applying for a refund has a 4-month period to communicate its decision.
This period is extended by 2 months if they have requested original documents.
Their decision will be sent to the company by email or post. If the application is accepted, the administration will make a transfer within ten working days.
Rejecting applications:
The company may receive a notice of rejection for their refund file. If this happens you need to work out why it was refused and then resubmit an application that complies with the regulations.
The reasons may be:
- Submission date for filing has passed
- Non-compliant invoice (incorrect or incomplete invoiced part, invalid VAT number, missing or incorrect VAT rate and/or amount), non-compliant import document, etc.
What documents are required to claim a VAT refund in Europe?
Supporting documents such as invoices and other sales documents are required when the amount before tax exceeds €1000, or €250 when it concerns the purchase of fuel.
Please note that the tax authorities in the Member States may have various requests of the applicant (e.g. original invoices or business documents, clarification of the nature of the expenses). The company has 30 days to respond to such requests.
What about non-EU countries?
To obtain a VAT refund or similar in a third country, you must, in most cases, appoint a tax representative there. Please contact us.
Why use a
fiscal representative?
The conditions for VAT refunds differ in each EU Member State. Don’t end up powerless when it comes to delays, questions or simply the inertia of certain administrative authorities.
Using a representative or an agent will allow you to:
- Secure analysis of your operations and their eligibility for deduction
- Calculate the amount of VAT/ taxes due to be refunded in each EU Member State
- Validate the conformity of invoices and other documents
- File claims for refunds
- Follow-up with the tax authorities
- Follow-up on requests for additional information
- contest a possible rejection by the tax authorities .
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For all European Union countries and some third countries.
For all European Union countries and some third countries. For all your VAT, Intrastat & ESL obligations, and your VAT recovery requests.
