MomsPartner - Professional VAT partner

About VAT

Intro Value Added Tax (VAT)

Since 1.1.2010 EU has changed the VAT directive for most services provided by Intercommunity sales and exports. From this date VAT is due in the country of the customer’s permanent establishment, using reverse charge. Many large companies experience, in spite of this change in rules, incorrectly charged VAT from suppliers or more often from sub-contractors. It is normally not possible to recover such VAT through standard refund procedure.

 

8/13th VAT directive

According to the 8th VAT directive, businesses that are established in one member state but receive supplies in another member state may be able to reclaim VAT charged in the second state. To do so, businesses need to have a value added tax identification number. A similar directive, the 13th VAT directive, also allows businesses established outside the EU to recover VAT in certain circumstances.

 

New VAT directive, reverse charge

Since 1.1.2010 EU has changed the VAT directive for most services provided by Intercommunity sales and exports. From this date VAT is due in the country of the customer’s permanent establishment, using reverse charge.

 

When do you need to register for VAT in foreign countries?

Businesses can be required to register for VAT in EU member states, other than the one in which they are based if they supply goods via mail order to those states over a certain threshold.

 

Who can recover foreign VAT?

All companies seated inside EU which has a value added tax identification number and receive supplies in another member state may be able to reclaim VAT charged in the second state. You can not reclaim VAT in a member state where you have a VAT identification number. Businesses established outside EU may also recover VAT in certain circumstances according to 13th VAT directive

 

How do you recover foreign VAT?

For EU member states you can reclaim VAT through an electronic tax portal in the country of establishment. For non-EU businesses a VAT reclaim application needs to be submitted manually