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Deadline Approaching - EU VAT refund claims

When an Irish VAT registered trader correctly incurs VAT in another EU member state, they cannot reclaim this VAT in their Irish VAT return. However this does not mean that the VAT is a sunk cost. In principle EU VAT law provides a mechanism whereby a business may reclaim foreign VAT paid in another member state. The Electronic VAT refund (EVR) service allows VAT-registered traders, who have paid VAT in another EU Member State, to submit a claim for a refund.

Some common examples of expenses on which non-resident traders may incur local VAT costs include:

  • Employee travel and expenses
  • Import VAT
  • Local purchases of goods
  • Clinical trials

Please note if you have incurred foreign VAT in an EU member state within which you are registered for/ liable to register for VAT, you should look to reclaim this VAT through the local registration.

Process

An applicant’s EVR submission is made directly to the tax authorities in their own country i.e. an Irish business should submit the application to the Irish Revenue.  Irish Revenue would then send the EVR claim to the member state of refund for processing. The member state of refund may require scanned attachments including invoices to be forwarded with a claim.

The EVR application must also include specific information in relation to the VAT incurred e.g. supplier details, VAT details, information about the specific type of supple etc.

The submission by an Irish registered taxpayer can be made by the taxpayer themselves or through their agent via Revenue’s Online Service (“ROS”).

Time Limits and Restrictions

Reclaiming foreign VAT via an EVR submission is more restrictive than reclaiming VAT through your local Irish VAT return, for example you do not have the usual 4 years within which to make the reclaim, instead an EVR application must be lodged by 30 September in the calendar year following the refund period i.e. VAT incurred in 2018 must be claimed by 30 September 2019. Additionally there are restrictions on minimum amounts that can be reclaimed via the EVR. 

Applicants may submit a maximum of five applications in a calendar year but the refund period cannot exceed 1 calendar year and cannot be less than 3 calendar months unless the application relates to the last quarter of a calendar year. You cannot amend a claim to increase your refund. You must wait and submit the additional invoices on the final 12 month period claim.

You should note that EVR reclaims are subject to the VAT recovery rules of the country to which the claim relates e.g. an Irish trader making an EVR reclaim in Germany will be subject to the German VAT deductibility rules.

How are Repayments Made?

The refund payment will be made by electronic funds transfer (EFT) to the bank details provided in the claim. 

If you require any assistance with submitting an EVR reclaim or would like to learn more please do not hesitate to contact us.

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