Tax & Accounting Blog

The New EU VAT Refund System

Indirect Tax, VAT-GST Management May 28, 2010

In January of this year in a blog titled “One month into the VAT package”  I informed of the new electronic procedure adopted by the EU Member States on January 1, 2010 on processing VAT reimbursement claims.  This is what I wrote: 

“Also, from 1 January 2010, the current procedure for reimbursement of VAT incurred by EU businesses in EU Member States where they are not established will be replaced by a new fully electronic procedure, thereby ensuring a quicker refund to claimants. The current paper-based procedure is slow, cumbersome, and costly. It also lacks in legal certainty. The new procedure will better facilitate businesses and improve the functioning of the internal market. A new feature is that businesses will be paid interest if Member States are late making refunds.  Will  all the requirements be applied uniformly in all EU Member States, will the procedure work, and will that lead to an increase in claims that were in many cases deemed to be not worth filing for?”

The International VAT Association (‘IVA”) that represents businesses and advisors involved in VAT worldwide recently provided the following assessment of how the EU VAT refund system is performing.  As it addresses my questions I am providing the link to you:

Please use this space to share your experience and comment on the situation.