The information you will find on this page covers issues related to refunds for cross-border transactions and not issues related to VAT refunds between a customer and vendor is the same country. If you are transacting with a UK based company or traveling to said destination, you may be entitled to claim back the VAT.
Below is what you need to know about qualifying for the VAT refund, when to file for the claim, and the UK VAT rates as well as the services where VAT refunds are eligible and the processes involved in recovering the VAT claim.
1] Who Can Claim VAT Refunds?
1) VAT Refunds For EU Claimants
If you have a VAT registered company in a country that is a member of the EU and conducted business across the borders with another Member State that is not VAT registered, you qualify to recover the VAT. This is according to the Directive 2008/9/EC as envisions in Articles 170-171a VAT Directive.
2) VAT Refunds for Non-EU Claimants
If you are in a country outside the EU, and you have a VAT registered business yet you pay VAT on transactions done with another company not VAT registered located in an EU Member State, you can handle the VAT affairs via a refund from the State where the VAT was paid. This is as per the 13th Directive (69/59/EEC).
UK VAT has a standard rate of 20%. It also has a reduced rate of 5% applicable to specific goods and services such as home energy, some social services, and things such as children’s car seats.
2] Deadlines for Claims Submission
- If your company is located in another State that is a member of the EU, the deadline for submitting a request for VAT refund is September 30 (Year n + 1).
- For businesses that are outside the EU, the deadline for requesting the VAT refund is December 31 (and this is for VAT charged between July 1st and June 30th of the previous period).
3] VAT Refund Information
Here are two essential things you need to know about VAT recovery.
1) Retrospective Claims
Where a company can request for VAT refunds from the previous VAT year, and there are not extended deadlines.
2) Rule of Reciprocity
A VAT registered EU claimant can request for the VAT refund from any other country that is a member of the European Union, but this is governed by the local VAT legislation of the said Member State.
For a claimant outside of the EU and refunds from a country that is not an EU member, some of the States will grant VAT refunds if the country where the business is registered has similar VAT claims regulations; this is what’s known as the rule of reciprocity.
The United Kingdom does not have the Rule of Reciprocity. As such, the UK authorities can approve claims to companies that are not in the European Union Member States whether or not the authorities in such countries have similar refund requirements.
4] Services Where VAT Refund Is Available
Some of the standard services where VAT claims are applicable include.
- Attending training courses, seminars, fairs and exhibitions.
- Fuel for various modes of transport.
- Food, drink and restaurant services for company employees.
- Hiring transport and travel expenses such as bus and taxi fares.
- Maintenance, parking, and transport.
- Lodging, accommodation, and related services.
- Repairs within a warranty period.
5] VAT Claims Chart
Note that every EU member country will have its rule and regulation; therefore, expect variations from state to state. Take a look at your VAT chart to know more about VAT refund in the different countries.
6] VAT Refund Process for EU Claimants
The applicant has to submit an electronic refund request to the national tax authority portal. The application should have the following information.
- The claimant’s details.
- An overview of the refund request.
- Details of each invoice related to the VAT claim application.
- Scanned copies of all invoices and documents related to importation where the taxable amount surpasses £200 (for fuel) and £750 (for other goods and services). The claimant may also have to submit smaller scanned copies of original invoices if and when requested.
7] VAT Refund Process for Non-EU Claimants
The claimant will have to send original copies to the tax authority where the VAT was paid and ensure the application provides the following.
- The claimant’s details.
- An overview of the refund request.
- A filled application form.
- Proof of the power of attorney.
- Details of each invoice related to the VAT claim application.
- The original invoices related to the claim.
- An original Certificate of VAT Status valid for the refund period in question and not older than a year. It also will serve as proof of business activity.
