EU Member States may impose the following two conditions in respect of the Third Country VAT Refund Procedure:
- the appointment of a tax representative in the EU Member State in question; and
- making the VAT refunds conditional on the granting by third States of comparable advantages regarding turnover taxes (reciprocity rule).
Spain has introduced both conditions in article 119 bis of the Spanish VAT Law (regulating the Third Country VAT Refund Procedure). Therefore, only taxpayers from non-EU countries with a reciprocal agreement in place may apply for a VAT refund (e.g. nowadays Monaco, Canada, Japan, Switzerland, Israel and Norway).
On 5 January 2021, the General Tax Directorate recognised the existence of reciprocity with the UK for the purposes of the Third Country VAT Refund Procedure
Source: europeantax.blog
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