Recovery of VAT incurred in other EU countries

Recovery of VAT incurred in other EU countries

Certain VAT incurred by a VAT registered business whilst abroad may be recovered. Such VAT is recovered using the Electronic VAT Recovery (EVR) system.

Unclaimed foreign VAT can be a significant cost for businesses

Each year businesses throughout Ireland miss out on re-claiming foreign VAT. This can amount to many thousands of euro.

What VAT may be recovered?

VAT incurred abroad on business purchases of goods and services e.g. stationery, equipment and supplies. Also included would be food and accommodation costs incurred by staff travelling abroad for work reasons.

How the EVR system works.

An Irish registered trader who has incurred VAT in an EU countries will make the claim using the Irish Revenue on-line system (ROS). The claim will be sent on to the tax authority of relevant EU country. When the claim is approved the EU country will issue a refund directly to the Irish business’ bank account.

A taxpayer is allowed to make up to five refund claims in a calendar year.

What do you need in order to make a claim for a refund?

All original receipts must be available, as these may be requested should documentary evidence be required to support a claim. Scanned invoices to support the claim may be attached however the total file size cannot exceed 5mb.

All documentation supporting a refund claim must be held for a least six years.

What are the main rules regarding EVR?

  • A claim must be made by the following September for the previous calendar year e.g. VAT incurred in June 2016 must be claimed by Sept. 2017.
  • Interim refund claim representing at least 3 months must amount to a minimum of €400.
  • Where the claim is for a full calendar year or, the remainder of a year, then the amount of the refund must be at a minimum of €50.

The next step!

If you are one of those many businesses who aren’t yet re-claiming foreign VAT then the deadline for 2016 has passed. However, now is time to put in place a system to capture the foreign VAT incurred for 2017.

For more details read here.

If you need any assistance the TaxMan would be happy to help.

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