Businesses that incurred VAT on business expenditure in the EU may be able to recover this VAT provided they apply the right procedures and comply with the deadlines of 30 June 2014 for non-EU businesses and 30 September 2014 for EU businesses.
For non-EU businesses, claims must be submitted with the relevant local EU tax authority where the VAT was incurred. Please note that some Member States require reciprocal relief be given to businesses established in their respective country by the country of the claimant. The deadline for applications for 2013 in most EU countries is 30 June 2014. With less than a week to go before the deadline, businesses should be collecting the required information right now to support a successful claim.
For EU businesses, claims must be submitted through an electronic portal in their Member State of establishment. The deadline for applications for 2013 refunds is 30 September 2014, so businesses can use the summer period to collect the required information in support of their claim.
We recall that where a business incurs VAT on business expenditure in an EU Member State where it has an establishment and/or an individual VAT registration, the VAT deduction/refund generally needs to be obtained via the normal domestic VAT return. Note that some Member States can be more restrictive on this point and only allow for domestic VAT deduction/refunds on business expenditure in relation to output transactions requiring a domestic VAT registration, meaning that foreign refund claims still need to be filed for other eligible business expenditures.
What does this mean for your business?
If your business is running operations in the EU, we recommend you identify the entities that have incurred VAT on business expenditure in 2013, analyse the VAT cost incurred (cf. non-refundable VAT costs), gather the supporting valid VAT invoices and other supporting documentation (certificate of tax status) to make a VAT refund claim according to the relevant procedures and deadlines.
For any additional information and information on how PwC can provide support with these claims, please contact your regular PwC adviser.