How does VAT refund work if you are based outside the EU?

This page will give you guidance and key information to understand how companies based outside the European Union can recover VAT in the EU.

πŸ‘‰ Concept

If your business is not established in the EU, and you are charged VAT on business activities in an EU country where you have not supplied goods or services, you may be entitled to have the VAT refunded by the authorities in that country. For example, a company established in USA takes part in a conference in Germany and is charged German VAT on their hotel bill.

πŸ‘‰ Can I claim any VAT paid?

In order to qualify for a refund procedure, during the refund period:

a business must NOT have:
  • been established in any EU country
  • supplied goods or services in the country where they incurred the VAT (except exempted transport & ancillary services or delivered services to customers solely liable for payment of the related VAT under the reverse-charge mechanism)
a business must make sure that:
  • Reciprocity: there must be an agreement between your country of establishment (e.g. USA) and the country of refund (e.g. Germany). Some countries like France or UK allow businesses from any country to reclaim VAT.
    πŸ’‘When you inject your invoice in VAT4U Platform our system will let you know if VAT can be covered or not
  • Business only: only business related expenses are refundable through this process
  • Compliant invoices: in most of cases, and in particular for high value invoices, invoices must be issued with the name of your company, otherwise, VAT refund may be rejected.
    πŸ’‘VAT4U Platform helps you identifying compliance issues
  • Deduction rules: each country may impose restrictions on the type of expenditure qualifying for VAT refunds. There are many rules to be aware of.
    πŸ’‘But the great news is that VAT4U Platform knows these rules and automatically calculates the amount you can recover! πŸ˜‰

πŸ‘‰ How can I do my claims?

After having registered here for free,  you can setup your account and add your invoices details on VAT4U. In case you have a massive number of invoices to inject we have solutions for you (connectors, data imports, support services, etc...)

Once all your invoices are injected into the platform, your VAT claim will be generated and ready to send to the relevant Tax Authorities. Note: in some countries it might be required to appoint a fiscal representative. VAT4U is happy to support you with this issue if needed.

πŸ‘‰ What about deadlines?

Each country apply a certain deadline to reclaim VAT. For non EU-businesses reclaiming VAT in EU, most of countries have the June 30th (or September 30th) as a deadline. This means that expenses for this current year Y must be reclaimed before June 30th of Y+1.
Example: invoices with invoice date between 01.01.2019 must be reclaimed before 30.06.2020.

UK: a special deadline (December 31st) applies to the UK who applies a deviating period.. Example: Expenses with invoice date between 01.07.2019 and 30.06.2020 must be reclaimed before 31.12.2020.

πŸ’‘VAT4U Platform knows the deadlines and will guide you through this πŸ˜‰

πŸ‘‰ Which supporting documents are mandatory?

Together with your claim form generated by VAT4U, you will need to submit:

  • VAT Claim Form: The one generated by VAT4U.
  • Tax Certificate: your company tax certificate, delivered by the Tax Authorities of your country.
  • Invoice originals: each original invoice for which you reclaim VAT must be submitted together with your claim. Copies are not accepted. πŸ’‘If you have hight value invoices but miss the original, simply contact the vendor to see if they can provide you with the correct document.
  • Power of Attorney: if you request VAT4U GOLD services or any representation, you need to issue a power of attorney (POA) to allow us to handle the VAT claim on your behalf. VAT4U will provide this ready to sign document to you.