Refund of VAT: taxable persons established in another EU country

KEY POINTS

The directive applies to any taxable person not established in the EU country of refund (but established in another EU country) who, during the refund period:

• did not have in that EU country, the seat of his economic activity, a fixed establishment from which business transactions were carried out or, in the absence of such a seat or fixed establishment, his home or normal place of residence;
• did not supply any goods or services in that EU country, except for certain exempt transport services and the supply of goods and services to a person who is liable to pay VAT.

EU countries must refund to any taxable person not established in their country (but established in another EU country) any VAT charged for goods or services supplied to him or her by other taxable persons in that EU country or for goods imported 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 that country must carry out transactions giving rise to a right of deduction in their own EU country. When a taxable person not established in the EU country of refund carries out in his or her own EU country both transactions producing a right of deduction and transactions not producing a right of deduction in that country, the EU country of the refund will only pay the proportion of refundable VAT.

Refund application

This directive introduces a fully electronic procedure. The taxable person not established in the EU country of refund (but established in another EU country) sends an electronic refund application to the EU country of refund via the electronic portal of his or her own EU country. The refund application relates to the VAT on the purchase of goods or services which was invoiced during the refund period, and the goods imported during the refund period.

The refund application must be submitted to the EU country of establishment before 30 September of the calendar year following the refund period. The amount of VAT refund applied for must in principle not be less than €400 (or €50 where certain conditions are met). If the country is late in making the refund payment, the applicant will be entitled to interest on the amount of the refund. The EU country of establishment must send the applicant an electronic confirmation of receipt without delay.