VAT Internationally – Reimbursement

VAT in the court of intracommunity trade is nothing simple to handle. Did not all European governments want to enhance the trade of businesses inside the European Community? Well, we will describe what you need to know to have any VAT inside the EU reimbursed.

Darn it! I had to pay my EU supplier’s bill with VAT and now how the heck am I to collect this input tax? Do I have to apply for refunding from every other European country? I bet I will have to start learning a language which I do not need.

Relax! Yes, you can apply for refunding the paid VAT. No, you do not have to learn another language. German will suffice – at least almost always. Only for details for code no. 10, keep on reading, might a translation be necessary since the contents of the form are uniform all over Europe. When you have some kind of “other (outside the catalog)” expense/income, that might need a translation. Assuming this “other expense” is in English, then – taking it from a practical standpoint – relax and do not worry about translation.

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Do I get the paid VAT back automatically or do I have to apply for it?

As sure as the world is round, you have to apply for refunding from a German administrative office. You have to apply at the Central Office of the place where your business is located for this foreign country, in other words in Germany and in German (art. 7 Directive 2008/9/EG). Pursuant to §18g UStG, this office is the Bundeszentralamt für Steuern.You will have to apply for each individual country from which you want a rebate. Aggregated applications are not possible. This application must be submitted electronically.

Technical / Procedural Details

What does an application contain?

The application must contain the following details (art. 8 Directive 2008/9/EG)!

  • Name and complete address of applicant,
  • address for electronic communication;
  • description of applicant’s business, for which the products and services have been bought;
  • Period of applied refunding;
  • applicant’s declaration that he has neither rendered any services nor sold any products during the refunding period in Germany – disregarding the above exceptions (pursuant to art. 3 lit. b no. i and ii Direktive 2008/9/EG);
  • applicant’s VAT-ID or tax registration number for purpose of refunding VAT,
  • Banking details (incl. IBAN and BIC).
  • name and complete address of supplier (goods and services);
  • VAT-ID or tax registration number of supplier (art. 239 and 240 der CSoVAT;
  • Prefix of refunding Member State (art. 215 CSoVAT);
  • Date and number of invoice or import document,
  • Net price and VAT amount in the original currency of the refunding State,
  • Computed amount of deductible VAT amount of deductible VAT pursuant to art. 6 II Directive 2008/9/EG in the original currency of the refunding State;
  • Eventually computed pro-rata-rate of input tax pursuant art. 6 Directive 2008/9/EG,
  • Kind of obtained goods or services, broken down by code number laid down in art. 9 Directive 2008/9/EG.

For breaking down the obtained / provided goods and services following code numbers are to be used (art. 9 Directive 2008/9/EG):

  • 1 for fuel;
  • 2 for renting means of transportation;
  • 3 for expenses for other means of transportation (other those mentioned under no. 1 or 2),
  • 4 for toll and fees for usage of streets,
  • 5 for traveling costs like taxi, public transportation means,
  • 6 for accommodation;
  • 7 for meals, beverages and restaurant services,
  • 8 for entrance fees for fairs and expositions,
  • 9 for luxury expenses, expenditures for recreation and representation,
  • 10 miscellaneous. N.B. When using this code number you are to describe the received goods or services.
Do I still have to present copies of my invoices?

Typically no, because everything is supposed to be done electronically – remember “eGovernment”. However, the individual Member State may require to have a copy of the invoices or import documents when the net sum of the bill totals to € 1,000 (€ 250 for fuel) or equivalent in that country’s currency (art. 10 Directive 2008/9/EG).

How much time do I have to apply for refunding?

You must submit your application for refunding (Erstattungsantrag) by the latest September 30 next year (i.e. the year following the year you are to report). However, bear in mind carefully that the application must be valid to count, i.e. it must meet all formal requirements of art. 8, 9 and 11 Directive 2008/9/EG (so art. 15 Abs. 1 Directive 2008/9/EG). For the sake of legal security, the Directive provides that the government is to send without undue delay a transmission receipt to you (art. 15 Abs. 2 Directive 2008/9/EG). Do check it very carefully in order to double check what you have submitted. September 30 is the final deadline (BFH, judgment of October 21, 1999, re V R 76/98). You have no chance to extend it – neither in advance nor afterwards!

Are there really no exceptions?

Pursuant to §110 AO, you can apply to be restituted into the previous status (“Wiedereinsetzung in den vorigen Stand”). This is not easy and you will have to produce good arguments.

After having submitted my report, does the German government just forward it or will this bureaucracy check if everything is correct? What happens?

You would be naïve to believe that a German agency does not check a report it gets handed. The Bundeszentralamt für Steuern functions as a collecting point for all nations – and vice versa. This office just makes a preliminary test for the following details:

  • Is the indicated VAT-ID correct and can it be assessed to the applicant without any doubt?
  • Is the applicant a business permitted to deduct input tax?
  • Does the transmitted application contain all mandatory details?
What happens when the office does not find any problems?

The Bundeszentralamt für Steuern forwards your application within the next 15 days to the relevant country via their electronic interfaces. Upon forwarding your application, this Central Office confirms that the VAT-ID is valid and the business is registered for VAT matters (art. 18 Directive 2008/9/EG).

Cool. I don’t have to make sure that the other European country really gets my application. But what happens when the office finds something is wrong in my application?

When Germany’s Central Tax Office, Bundeszentralamt für Steuern has a reason to complain (e.g. the VAT-ID is wrong), it will reject your application and will not forward it the other country (art. 18 Directive 2008/9/EG). You have the right to contest this decision (Einspruch einlegen). 

Tagged under: VAT, Business Law,
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