EU VAT refund scheme
The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The amount refundable depends on the other country’s rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never by reclaimed on a domestic UK VAT return.
Claims must be made electronically via the tax authority in which the claimant is established i.e. a claim from a UK company to any other EU country must be submitted electronically to HMRC. The deadline for the submission of a refund request for expenses incurred in other EU member states during the 2016 calendar year is 30 September 2017. HMRC will forward the claim to the country where the VAT was paid.
VAT registered businesses in the UK can use the scheme to reclaim the VAT paid in other EU countries where all the following apply:
- They are not VAT-registered in the EU country where they are making a claim and don’t have to be or can’t be registered there.
- They don’t have a place of business or other residence there.
- They don’t make any supplies there, unless they are transport services for the international carriage of goods or the person they are supplying pays VAT on the supplies.
HMRC has recently released an updated version of VAT Notice 723A which provides more details on submitting a claim for a refund of VAT incurred in other EU countries. The notice also explains the procedure for businesses established outside the EU submitting a claim for VAT incurred in the UK. The deadline for the submission of a refund request for expenses incurred in the UK by non-EU businesses during the period 1 July 2013 – 30 June 2014 is31 December 2014. There are a number of conditions which must be met in order for a claim to qualify.
The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The exact rules of what VAT is refundable depends on the other countries’ rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never by reclaimed on a domestic UK VAT return.
Under the regime claims must be made electronically via the tax authority in which the claimant is established i.e. a claim from a UK company to any other EU country must be submitted electronically to HMRC.