Generally, businesses may be able to claim paid VAT* refunded from the relevant tax authorities in the jurisdiction the VAT is charged. This is usually applicable although you are not (and not obligated to be) registered for VAT or established (e.g. through a local branch or a local company) in the jurisdiction the VAT is charged.
*VAT (Value Added Taxes), for the purposes of this document VAT also refers to GST (Goods and Service Taxes) and other indirect taxes that may be due under the laws of the respective country
The process to claim the VAT or similar refund depends on several factors generally (but not limited to):
- where you are established,
- local rules of the country where the VAT is charged,
- what activity you perform in the relevant country etc.
Note that there may be fees due to submit the refund application.
Further, note that VAT refunds are normally only available if you are not obligated to register for VAT in the relevant jurisdiction. See below for a general overview of when you will be obligated to register. If you are registered in the relevant jurisdiction, you should be able to deduct the incurred VAT in your next VAT report.
Items to review with respect to claiming a VAT refund:
- Review whether you have a VAT registration in the relevant jurisdiction, or if you are required to register. You can read more about VAT registration in the relevant section below.
- If obligated to register for VAT in the relevant jurisdiction, you can apply to register with the relevant authorities and claim tax charges deducted from the local VAT report. Note that a special procedure for claiming VAT may be needed for VAT paid prior to the registration date.
- If you are not obligated to register for VAT, you should apply for a VAT refund. Please refer to the information provided below. Note that in some countries it is not possible to claim a refund. In such cases, it should be reviewed if a voluntary VAT registration may be obtained to claim the VAT refunded.
VAT refunds in Europe – an introduction
**As of January 1st, 2021: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden
The EU VAT refund process is different for businesses established within the EU and for businesses without such establishment (e.g. through a local branch):
If established within the EU
An EU Member State must refund VAT to eligible claimants established in other Member States. To be eligible for a VAT refund several conditions should be met, including but not limited to: the claimant must not make taxable supplies of goods or services in the Member State (where this claimant itself would be liable to handle VAT for these sales).
The deadline for filing a refund application for EU-established businesses is 30 September of the calendar year following the refund period. Refunds should generally be paid within six months after the Member State authority receives the claim application.
If not established within the EU
VAT refund can usually be claimed if certain requirements are satisfied, e.g. usually that the jurisdiction where the claimant (i.e. you) is a resident provides the same relief to its own VAT and that you do not perform supply of goods or services in the Member State (where this claimant itself would be liable to handle VAT for these sales).
The deadline for filing a refund application for businesses not established within the EU is generally within six months after the end of the calendar year, that is, i.e. by 30 June of the following year. Notably, some EU countries may have different refund application deadlines. Refunds should generally be paid within six months after the Member State receives the claim.
For UK VAT charged after 31 December 2020: UK VAT refund procedure follows local UK rules and is available under certain conditions, including but not limited to the VAT refund claimant does not make any taxable supplies in the UK (regardless of their value), apart from when UK VAT is self-assessed by the buyer.
UK VAT refund claims must be submitted no later than 31 December (for UK VAT incurred between 1 July previous year to 30 June of the current year) and are generally processed by the UK tax authorities within six months.
For more information, see: https://www.gov.uk/guidance/vat-refunds-for-non-eu-businesses-visiting-the-uk
Non-Norwegian businesses that incur Norwegian VAT may apply for a VAT refund under several conditions, including but not limited to the non-Norwegian businesses that did not have any taxable sales in Norway during the last 12 months exceeding NOK 50 000.
The deadline to submit the VAT refund applications for the preceding calendar year is 30 September. The refund application is usually processed within six months.
Non-Swiss businesses that incur Swiss VAT may claim VAT for a refund if they have not made any taxable supplies in Switzerland or Liechtenstein. VAT refund is not allowed for non-Swiss businesses that are required to account for Swiss VAT and have a global turnover of more than CHF100,000. In this case, the business should register for Swiss VAT from the first franc of taxable turnover generated in Switzerland and claim incurred VAT in its Swiss VAT report. VAT refund is contingent on the country of establishment of the VAT refund claimant allowing Swiss businesses to apply for a refund of the VAT. The deadline for applying for a refund claim is 30 June following the calendar year in which the supply received was invoiced. VAT refunds in Switzerland are generally made within six months after the date of application.
Only businesses registered for Australian GST may claim a refund of GST incurred in Australia. In general, businesses (including non-Australians) that make acquisitions in Australia for the purposes of their enterprises may register for GST if necessary. However, note that the non-Australian businesses that elect for “limited registration” are unable to recover any GST incurred in Australia.
Only businesses registered for GST in New Zealand may claim refunds of GST incurred in New Zealand. A non-New Zealand business that does not make taxable supplies in New Zealand may still register for GST to recover GST incurred in New Zealand under certain conditions.
Gelato is not a financial or tax advisor, therefore the above regulation is written by Gelato’s tax advisor EY. EY (Ernst & Young Advokatfirma AS) is a leading provider of indirect tax, VAT, and customs services. Should you have any queries pertaining to this, you may seek advice from EY. You will have to enter into a separate agreement with EY for the provision of such services.