Legislation under which exist the institution of the VAT refund was created by the European Union, and they are:
- Directive 79/1072 / EEC, other name: 8th VAT Directive of 6 December 1979, for the European Union countries, which was later replaced by Council Directive 2008/9 / EC of 12 February 2008, entering into force on 1 January 2010,
- Directive 86/560 / EEC, other name: 13th VAT Directive of 17 November 1986, for countries outside of the European Union,
- Local law of the country to which we claim.
The foreign VAT in the European Union, which is part of a service or commercial goods (which next are imported into another Member State), from 1 January 2010, are invoiced without VAT. According to European law, the place of performance is the registered seat or place of business of the person who receives the service, it is a so-called REVERSE CHARGE system. Tax liability is transferred from the vendor to the customer. Under the reverse charge system are not services like: real estate services, short-term rent of vehicles, transport, hotels, restaurants and many others. Although the law was changed in 2010, even today happen mistakes done by suppliers, who erroneously issue an invoice for the service / goods included VAT. Our Specialists during the verification of documents are able to find such a bad document, and on the basis of local regulations apply for a refund of the wrongly charged VAT.
Below are the main foreign payments which include VAT:
- accommodation (hotels, apartments, B & B)
- payments in restaurants, catering
- the majority of real estate services
- parking, ferries, loading and other transportation costs, for example. highway
- short-term rental vehicles
- training, conferences, consultations
- tools and goods that remain in abroad
Each country has its own restrictions and rules on the reimbursement of VAT. In one country in example we can apply for a VAT refund from the fuel in another country is not possible. In Germany meals are refundable, but in Czech Republic it’s not.
In some countries, for badly completed application, Tax Authority may assign a penalty, up to 100% of the claimed amount. Therefore, it is wise to take advantage of professional help in the field, who have knowledge of local laws and restrictions.