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If you buy goods or services for your business in other countries in the European Union (EU), you may have to pay VAT on them. You may be able to reclaim the VAT you paid in the other EU country if you're VAT-registered in the UK, and bought the goods or services to use in your business.
You can't reclaim it on your VAT Return but there's a Refund Scheme that you might be able to use to reclaim it from the other EU country. What you can reclaim depends on the other country's rules for claiming input tax.
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Anyone who's registered for VAT in an EU country can use the Refund Scheme to reclaim VAT paid in another EU country. This means that if you're VAT-registered in the UK, you can use the scheme to reclaim VAT you've paid in another EU country on goods or services you've bought for your business.
You can only use the Refund Scheme if all of the following apply:
But if you do make supplies in the EU country, you can still use the scheme if the only supplies you make there are either:
You can't use the Refund Scheme to reclaim VAT on:
When you bring in goods from another country in the EU to use in your business, these are dispatches from the other EU country. You can't use the Refund Scheme for them but they'll be zero-rated, as long as:
Goods or services you buy for resale might include things like hotel accommodation you buy to resell to people travelling in another EU country.
You can use the Refund Scheme for anything else you buy for your business - but you need to keep in mind that:
If you bring in goods to use in your business from outside the EU into an EU country other than the UK - these are called imports - you may have to pay VAT on the imports in that EU country. You can use the Refund Scheme to reclaim the VAT you've paid on these imports unless you either:
If you're registered for VAT in the UK you don't use the Refund Scheme to reclaim any VAT you pay on goods you import into the UK from outside the EU. You can reclaim the VAT as input tax on your VAT Return. You'll need the import VAT certificate, form C79, to show that you've paid the import VAT.
You claim refunds of VAT paid in other EU countries electronically, on a standardised form through the UK Government Gateway or HM Revenue & Customs (HMRC) VAT Online services, rather than direct to the EU country, but see below for refunds of VAT paid in Monaco.
You can claim the refund yourself or you can ask an accountant (or 'agent') to do it for you.
Each EU country has slightly different rules for using an agent. But before they can act for you, you'll normally have to give your agent either:
The minimum amounts you can claim vary slightly between EU countries, but are approximately:
Each member state will publish its own limits.
You must submit your claim by the 30 September of the year following the one in which you were charged the VAT. For VAT you’ve been charged during 2010, you must submit your claim by 30 September 2011.
Your claim can't be for a period of:
You can include in your claim any items you missed on earlier claims so long as they relate to VAT charged in the calendar year you're claiming for.
Before you can make your first claim online, you will need to have registered and enrolled to use VAT online services. If you’ve not already done so, do this as soon as you can, as you will need an activation code (also known as an activation PIN) before you can claim for the first time. The activation code is sent by post and can take up to a week to arrive.
If you want an agent to submit your claim, they will need to register and enrol to use the HMRC VAT for Agents service. You will then need to authorise them to submit claims on your behalf.
The VAT EU Refunds service offers you the option to set up multiple agent authorisations. This is useful if, for example, you want to appoint a different agent for each EU member state.
Once you have enrolled for the VAT EU Refunds service, you can complete your claim online. If you need to enter any notes when filling in your online claim it must be in a language accepted by the country you are claiming from. This information will be available on screen.
If you don't have all the information you need to complete your claim, you can save it in draft form and return to it later. You can save one draft claim for each EU country.
When you have successfully entered your claim you will be given a GB reference number on screen. You should keep a note of this, as you will need to refer to it in any communications with the country you made the claim from. You will also need it if you want to make any corrections to your claim after you've submitted it.
After your claim has been entered it will be forwarded to the country where the VAT was charged. This country is referred to as the Member State of Refund (MSREF). If you do not receive a confirmation of receipt from this country within 15 days then you should contact the Member State of Refund to see if the claim has been received. Contact details for other member states can be found in Notice 723A.
If the Member State of Refund does not have a record of your claim then you should contact the Online Services Helpdesk.
As this is an online system, you don't need to send any paper invoices or other documents to other EU countries when you submit your claim. However, some countries will ask you to scan invoices over certain values and attach these to your claim. You won’t normally be asked to send scanned documents for purchases or imports with a value less than 1,000 euro, or 250 euro for fuel purchases. You should check the websites of the countries concerned to find out their requirements. You must keep all of the original invoices and other documents supporting your claim. You will need information from these to complete your claim and some EU countries may sometimes ask to see original documents later in order to authorise your claim.
You can not send documents which are over 5MB with your claim. If the attachments are too big you will need to delete some before you can submit your claim. You can include your documents in a zip file.
You will receive confirmation, by email, when your claim has been received by the country you're claiming from. This may take up to 15 days from the date when you submitted the claim, but should normally be much sooner. Once you have received this confirmation, you should send any queries about the claim to the tax authority in the EU country concerned. HMRC cannot intervene on your behalf.
The EU country you're claiming from must give you a decision on your claim within four months of receiving it. If they need further information, they must ask you for this within the same four month period, and you must provide the information within one month. They will then have further time to consider your claim, but they must give you a final decision no later than eight months after they received your claim.
If there is a refund due to you, they must pay this within:
If they do not pay you within these timescales, you will be entitled to interest on the amount of the refund. The interest will be calculated at the rate which applies to traders in the EU country concerned, and will run from the date payment was due until the date payment is made.
EU countries will make refunds by credit transfer, usually in their own currency. You can arrange the transfer either in the EU country itself or in the UK, by entering the relevant bank account details when you complete your claim. If you have to pay bank charges on the transfer they may be deducted from the amount of your refund.
You can help to ensure that your claim won't be refused by making sure:
If your claim is refused, the VAT authority in the EU country you've claimed from must give you reasons for not making a refund. You can use their appeals procedure to appeal against their decision.
The normal appeals rules of the EU country will apply to time limits, form of appeal and so on. You can't ask your own VAT authorities to help you in any way with an appeal against the decision of another EU country.
EU countries take a very serious view of incorrect or false claims and you must make every effort to ensure that your claim is complete, accurate and you've taken reasonable care when completing it. As well as recovering the overpaid amount, they may charge a penalty and stop making refunds.