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Refund of VAT: taxable persons established in another EU country

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Refund of VAT: taxable persons established in another EU country

This directive sets out the rules for the refund of value added tax (VAT) to taxable persons not established in the European Union (EU) country of refund but established in another EU country. It also establishes a new fully electronic procedure of VAT refund applications, thereby enabling a quicker refund to claimants.

ACT

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State [See amending act(s)].

SUMMARY

This directive lays down the detailed rules for the refund of value added tax (VAT), provided for in Directive 2006/112/EC, to taxable persons not established in the European Union (EU) country of refund * but established in another EU country.

This directive applies to any taxable person not established in the EU country of refund who, during the refund period:

  • has not had in the EU country of refund, the seat of his economic activity, a fixed establishment from which business transactions were effected or, in the absence of such a seat or fixed establishment, his domicile or normal place of residence;
  • has not supplied any goods or services in the EU country of refund, with the exception of the supply of certain transport services and the supply of goods and services to a person who is liable to pay VAT.

Directive 2006/112/EC establishes the transactions which EU countries may exempt from VAT. EU countries must therefore refund to any taxable person not established in the country of refund any VAT charged in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that country, when used for the purposes of the transactions listed in Directive 2006/112/EC.

To be eligible for a refund in the EU country of refund, a taxable person not established in this country must carry out transactions giving rise to a right of deduction in the EU country of establishment. When a taxable person not established in the EU country of refund carries out in his EU country of establishment both transactions producing a right of deduction and transactions not producing a right of deduction in that country, the EU country of refund will only pay the proportion of refundable VAT.

Refund application

This directive establishes a fully electronic procedure, whereby the taxable person not established in the EU country of refund addresses an electronic refund application to the EU country of refund and submits it to his EU country of establishment via the electronic portal of that country. The refund application relates to the purchase of goods or services which was invoiced during the refund period, and the importation of goods during the refund period.

The refund application must be submitted to the EU country of establishment by the 30 September of the calendar year following the refund period. The amount of VAT refund applied for must not be less than EUR 400. If the country is late in making the refund payment, the applicant will be entitled to interest on the amount of the refund.

This directive repeals Directive 79/1072/EEC, however its provisions continue to apply to refund applications submitted before 1 January 2010.

Key terms used in the act

  • EU country of refund: the EU country in which the VAT was charged to the taxable person in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that EU country.

References

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2008/9/EC

20.2.2008

1.1.2010

OJ L 44, 20.2.2008

Amending act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2010/66/EU

21.10.2010

-

OJ L 275, 20.10.2010

Successive amendments and corrections to Directive 2008/9/EC have been incorporated into the basic text. This consolidated version is for reference only.

RELATED ACTS

Commission Regulation (EC) No 1174/2009 of 30 November 2009 laying down rules for the implementation of Articles 34a and 37 of Council Regulation (EC) No 1798/2003 as regards refunds of value added tax under Council Directive 2008/9/EC [Official Journal 314 of 1.12.2009].

Last updated: 09.03.2011

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