EU VAT Refund Procedure: a Separate System from OSS

VAT on business expenses incurred in the Member State of consumption cannot be offset against supplies declared in the One Stop Shop VAT return. In order to claim these expenses, the taxable person must utilize the Electronic VAT Refund Mechanism (as per Council Directive 2008/9/EC) or follow the procedure outlined in the 13th VAT Directive (Council Directive 86/560/EEC). Alternatively, if the taxable person is registered (but not established) in the Member State of consumption, they can claim the expenses through the domestic VAT return (VAT in Germany, VAT in Lithuania, etc.)

In this article we provide the main information with regards to the latest European Mechanism for Refunds, the one contained in the Council Directive 2008/9/EC:

• Electronic VAT Refund Mechanism (CD 2008/9/EC):
  • In order to receive a reimbursement of VAT from the Member State where the refund is sought, the taxable individual who is not based in that Member State must submit an electronic refund request to the respective Member State and forward it to the Member State where they are established using the electronic platform established by that Member State.
  • “The refund application shall contain the following information:
    • (a) the applicant’s name and full address;
    • (b) an address for contact by electronic means;
    • (c) a description of the applicant’s business activity for which the goods and services are acquired;
    • (d) the refund period covered by the application;
    • (e) a declaration by the applicant that he has supplied no goods and services deemed to have been supplied in the Member State of refund during the refund period, with the exception of transactions referred to in points (i) and (ii) of Article 3(b);
    • (f) the applicant’s VAT identification number or tax reference number;
    • (g) bank account details including IBAN and BIC codes.” (CD 2008/9/EC)
  • “In addition to the information specified in paragraph 1, the refund application shall set out, for each Member State of refund and for each invoice or importation document, the following details:
    • (a) name and full address of the supplier;
    • (b) except in the case of importation, the VAT identification number or tax reference number of the supplier, as allocated by the Member State of refund in accordance with the provisions of Articles 239 and 240 of Directive 2006/112/EC;
    • (c) except in the case of importation, the prefix of the Member State of refund in accordance with Article 215 of Directive 2006/112/EC;
    • (d) date and number of the invoice or importation document;
    • (e) taxable amount and amount of VAT expressed in the currency of the Member State of refund;
    • (f) the amount of deductible VAT calculated in accordance with Article 5 and the second paragraph of Article 6 expressed in the currency of the Member State of refund;
    • (g) where applicable, the deductible proportion calculated in accordance with Article 6, expressed as a percentage;
    • (h) nature of the goods and services acquired, described according to the codes in Article 9.” (CD 2008/9/EC)
  • The Member State may require additional information based on the details provided in order to analyze and handle the corresponding refund.

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