Have you incurred expenses in another EU country where you are not established and have paid VAT? You may, under certain conditions, be entitled to a VAT refund, because VAT is not a charge for your business, even if you have paid it in another EU Member State.
What is the intra-community VAT refund scheme?
The intra-community VAT refund mechanism concerns companies that pay VAT in one or more EU countries where they are not established. This concerns companies established both in the EU and outside the EU. As for example a French company which requests refund in another EU Member State or the case of an intra-Community company which request refund in France, or even the case of a Swiss company asking for a refund in France.
What are the conditions for the VAT refund in the EU?
VAT refund is only possible if the following conditions are met:
The company has not carried out any transaction for which it is liable for VAT in this State (excluding imports) and which would require it to register for VAT
VAT has been charged by the supplier or service provider
VAT concerns expenses for the purchase of goods or services used for transactions eligible for VAT refund
As the rules for deducting VAT differ from one Member State to another, it is therefore necessary to analyze local regulations and the content of reciprocal agreements in order to determine whether VAT is recoverable or not.
What expenses are subject for a VAT refund?
The expenses must be necessary for the company activity such as:
- Expenses related to business trips (transport, accommodation, catering)
- The rental of a space and access rights as part of the participation in a trade show or fair
- Training and conferences participation
- Showroom rental for an exhibition (fashion, arts, etc.)
- Purchases made for a liaison office
Those expenses are eligible for VAT refund in the majority of Member States of the European Union.
Expenses for which a right of deduction is applicable in one country is not necessarily applicable in another EU Member states. Consequently, it is necessary to ensure that the expenses concerned, give rise to the right of VAT refund before filing the request.
Our foreign VAT refund service
Tax laws, rules and regulations are constantly changing in different EU countries. Due to several constraining factors and deadlines to be met, it is important to correctly follow the procedures and file a compliant file in each country in order to ensure your VAT refund, which makes the process of recovering foreign VAT complex for companies that often do not have the knowledge required to start the procedures specific to each country.
By using the services of Eurotax, an expert in intra-community VAT recovery for more than 40 years, you will be sure to be in compliance during the filing procedure for your VAT refund request.
You can visit our dedicated page for VAT refund here, or contact us for any question.