VAT is conceived
as a neutral tax for businesses

Reclaiming
VAT

VAT is a neutral tax for businesses and was designed to tax private consumers.

Therefore VAT registered businesses are allowed to deduct VAT or claim it back from the Tax Authorities.

However not all purchases or expenses give right to VAT deduction or VAT reclaim. Deducting VAT is therefore sensitive as a wrong VAT deduction can lead a tax audit.

Companies are usually aware about VAT reclaim rules in their own countries. They are however less confident when it comes to VAT paid in other EU countries.

This paragraph will mainly describe how businesses can reclaim VAT in EU Member States where they don't have a fixed establishment.

The VAT reclaim process is however different if your company is based within or outside the European Union.

Is your input VAT reclaimable?

This is the first question you should ask yourself before submitting a VAT refund claim. Even if VAT is generally claimable there are some exceptions which differ from countries to countries. For more information please refer to the page related to your country of interest.

Input VAT will obviously be refundable only if it directly relates to goods and services that were used for your business.

Please also make sure that VAT was correctly charged by your supplier before filing a VAT refund claim as incorrectly VAT charged makes it not refundable.

Where is your company established?

1. Your company is based within the European Union

The European Union implemented in 2010 a common process called "the 8th Directive" whereby businesses can claim back the VAT they paid in any Member State through an electronic portal (also called “one stop shop” of their own country's Tax Authorities.

1.1 Conditions for applying a 8th Directive VAT refund claim :

  • Your company cannot be established nor be VAT registered in the country where input VAT was paid,

For example, a German based company which is registered for VAT in France cannot reclaim VAT through the French electronic portal. This company will have to file a VAT refund claim through regular French VAT declarations.

  • The input VAT has to relate to professional expenses or purchases.
  • The VAT has to relate to goods or services that give right to refund in the country of refund. Please refer to us to check whether your purchases are refundable.

1.2 Periodicity and Filing deadline

VAT refund claims can be filed either on a quarterly or on a yearly basis.

Applications must be processed electronically at the latest before 30 September of the calendar year following the refund period.

Late applications are always rejected by the Tax Authorities of the country of refund and input VAT is definitively lost.

1.3 Minimum amounts

Most EU Member States set up minimum amounts for VAT refund. These minimum amounts are as follows

  • 400 Euros for quarterly refund claims,
  • 50 for yearly refund claims.

1.4 Documents to provide to the Tax Authorities

Tax Authorities usually require the following documents. These documents have to be uploaded directly on their electronic portal.

  • Copies of purchase invoices,
  • Copies of import documents.

The uploaded file cannot in principle be more than 5MB and should include the biggest amounts of invoices and import documents.
Local Tax Authorities are however entitled to require more documents which can in this case be provided by email.

1.5 Duration of the process

Tax Authorities theoretically have the obligation to inform businesses within a 4 month period about their decision to refund or not VAT.
This period can however be renewed if the Tax Authorities are requiring more documents.

1.6 Repayment process

If your VAT refund application is accepted, the local Tax Authorities will organize a bank transfer directly to your bank account.

2. Your company is based outside the EU?

Example: your business is based in the US. You imported goods in France and purchased products from some French suppliers who charged your company with French VAT.
Your company is entitled to reclaim both import VAT as well as VAT paid on your purchases.

This VAT refund process is called the “13th Directive”.

There is however no One stop shop available for “13th Directive” VAT refund claims. As a result, claims have to be filed directly with the Tax Authorities of the country of refund.

2.1 Conditions for applying a VAT refund claim under the “13th Directive” VAT refund claim :

  • Your company cannot be established nor be VAT registered in the country where you paid VAT on your imports, purchases of goods or imports,

For example, a US based company which is registered for VAT in the Netherlands cannot reclaim VAT through the Dutch tax Authorities. This company will have to file a VAT refund claim through regular Dutch VAT declarations.

  • The input VAT has to relate to professional expenses or purchases.
  • The VAT has to relate to goods or services that give right to refund in the country of refund. Please refer to us to check whether your purchases are refundable
  • Your country of establishment may have signed a convention of tax reciprocity with the Authorities of the country of refund.
  • Your company may have to appoint a fiscal representative that is established in the country of refund. The mission of the fiscal representative will be to prepare and file the VAT refund application with the local Tax Authorities.
    The fiscal representative will be responsible towards the local Tax Authorities in case the VAT refund claim was not fulfilling the conditions described here above.

Periodicity and Filing deadline

VAT refund claims can be submitted on a quarterly or on a yearly basis.

  • If filed on a quarterly basis, VAT refund applications have to submitted to the country of refund during the month following the quarter where VAT was paid.
    As an example, VAT paid on imports or on goods in January, in February and in March has to be claimed back in April.
  • If filed on a yearly basis, VAT refund applications have to be submitted in the country of refund at the latest on 30 June of the following year.
    As an example, VAT paid on imports or on goods paid in Year Y1 must be claimed back at the latest on 30 June Y+1.

Please pay attention that late VAT refund applications are always rejected and input VAT is definitively lost.

2.2 Documents to provide to the Tax Authorities

The local Tax Authorities usually require the following documents.

  • Company’s details (name, address, bank details, …),
  • Copies of purchase invoices, import declarations or travel expenses,
  • Proves of payment,
  • Proxy signed by a fiscal representative (if required by the country of refund),

2.3 Repayment process

If accepted by the Tax Authorities of the country of refund, your company will receive the money directly on your back account through an International bank transfer.

How can we help you today?

Do you have questions about how RMB can help your business? Send us an email and we’ll get in touch with you shortly, our VAT experts are always happy to help. You can also contact us by phone: +33 3 20 25 70 70.

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