In addition to the various domestic options to avoid liquidity problems in the area of VAT (accelerated refund, conversion from monthly to quarterly returns or vice versa, etc.), the refund of foreign VAT is often overlooked.
Indeed, businesses can, in principle, recover the VAT they incur in an EU Member State where they do not submit VAT returns, regardless of whether or not they are established within the EU.
Also for similar taxes paid outside the EU (e.g. Sales Tax and the Goods and Services Tax), a refund can often be requested, according to the applicable procedure in these different countries.
However, this refundable VAT is often ‘forgotten’, whereby millions of euros of foreign VAT are not reclaimed.
A different procedure must be followed for the refund of European VAT depending on whether or not the company is established within the EU.
For European businesses, this request can be submitted quickly and efficiently electronically via a portal site in the Member State of establishment. Non-established businesses should follow the more cumbersome procedure under the "13th Directive".
It should be noted that, after the transitional period, UK-based companies will also qualify as non-EU businesses, and vice versa, UK VAT can no longer be recovered by EU businesses via the portal site.
As far as GST/Sales tax is concerned, the applicable procedure should be checked on a country-by-country basis.
The deadline for submitting EU VAT refund requests expires 30 September of the subsequent year.
Nothing precludes you from submitting VAT refund requests on a quarterly basis, provided that the amount of refundable VAT amounts to at least 400 EUR.
4. WHY RSM?
In practice, refund requests are often submitted without furhter verification of the underlying transactions, which can lead to requests for information by the foreign VAT administrations. In this case, it takes a great deal of knowledge, effort and time to process the request.
RSM Belgium has the specific knowledge and a extensive network to ensure that the refund procedure in the other 27 EU Member States and outside the European Union runs smoothly and efficiently, from the submission of the request to the actual refund.
If you would like to receive additional information on this matter or VAT assistance, the tax team of RSM Belgium is at your disposal : [email protected].