The Brexit deal agreed between the UK and the EU has shortened the normal deadline for submissions for the Directive 2008/09/EC (formerly the 8th Directive) VAT refund using the electronic portal process.
Within the new agreement, a revised deadline has been introduced to finalise 8th Directive claims between the UK and EU Member States and EU Member States and the UK for any invoice’s issued in 2020.
Claimants will only be able to use the 8th Directive EU VAT refund system to claim a VAT refund on expenses incurred before 1st January 2021 in EU member states until 11pm on 31st March 2021.
This means that there are just two months left for businesses to have all the necessary documentation in place for their refund claim to be submitted electronically. If they are unable to do this, businesses run the risk of losing the right to a refund of VAT for UK to EU and EU to UK claims.
Post Brexit claims for costs incurred from 1st January 2021 will have to be claimed under the 13th Directive which is a predominantly physical process.
It will not be possible to recover the VAT for 2020 under the 13th Council Directive 86/560/EEC (13th Directive) on any items not filed through the 8th Directive for the same period. For almost all EU countries, to utilise the 13th Directive to make a VAT recovery claim a business must NOT have been registered in the EU during the refund period.
Belgium and Latvia are the only two countries to have made an exception to this rule. Both have confirmed that they will accept 13th Directive claims between April and June 2021 for 2020 invoice items irrespective of whether an 8th Directive claim has also been filed for 2020 items.
From 1st April 2021 original hard copy invoices and documents will be required by virtually all Member States of Refund for UK to EU and EU to UK claims. As of the date of publication, the refund countries below do not currently have reciprocal agreements with the UK which means that recovery may not be possible unless the UK or EU make allowances until reciprocity is agreed.
Quipsound will continue to provide updates as information is received from HMRC and EU Member States regarding future VAT recovery filing requirements.