Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

New EU VAT refund process

by
27th Apr 2009
Save content
Have you found this content useful? Use the button above to save it to your profile.

Smaller businesses which have not previously been able to recover VAT borne in the EU will benefit from a change to commence on 1 January 2010.

As part of an EU simplification measure, the process for reclaiming VAT incurred in other member states will be significantly streamlined, with claims made electronically, rather than on paper, and submitted to the home tax authority – in the UK this is HMRC.

So the convoluted process applying before under which many small businesses gave up the unequal effort to recover input tax borne abroad comes to an end. Probably the only ones sad to see it go are those who have made a business by handling these claims for a fee.

The main changes from the paper-based system are:

  • Businesses have longer to submit their claims, with a time limit of nine months from the end of the calendar year in which the VAT was incurred, rather than six months as at present.
  • Tax authorities will also have to make payment more quickly than under the current rules. They will be allowed four months rather than six to make repayments, unless further information is requested in which case the deadline extends up to a maximum of eight months; Where this deadline is not met, the refunding tax authority will be required to pay interest.
  • All EU Member States will be required to afford a right of appeal against non-payment in accordance with the procedures prevailing in the Member State of Refund.

For more details see Budget Note 77

Tags:

Replies (1)

Please login or register to join the discussion.

avatar
By abelljms
07th May 2009 11:40

wow
at last HMRC/Bruxelles do something to seriously help small businesses do international business.

it will be interesting to see how the reality pans out of course..............

Thanks (0)