- Companies can recover VAT incurred in foreign countries, but the correct procedure must be followed to claim the refund.
- There are two procedures to claim back VAT: through the VAT return or through a Refund Claim. Businesses must recover VAT through the VAT return if they are VAT registered in the country where VAT was incurred.
- If not registered, VAT can be recovered through an EU Refund Claim or 13th Directive procedure.
- Before the VAT refund is accepted, the tax authorities may carry out an audit to confirm the right to deduct VAT.
- Non-VAT registered businesses that incur VAT in a Member State can normally recover these amounts through the 13th Directive refund claim.
- The eligibility for the refund sometimes requires a reciprocity agreement between the country of refund and the country of establishment of the claimant.
- It is important to make sure that no taxable supplies have been made in the period of refund before requesting a VAT refund through the 8th or 13th Directive.
Source Marosa
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