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A company that is not registered for VAT purposes in a Member State and has incurred expenses in that Member State may recover the VAT it has paid. Application for the reclaim of VAT paid must be made in accordance with the procedure detailed by the 8th European VAT Directive. The application has to be made on paper with a specific form – usually provided by the Member State where reimbursement is requested – to which original invoices and a certificate of taxable status have to be attached.

In theory, this procedure is quite simple but in fact, reclaiming foreign VAT can be a very difficult task, especially in some countries. To face that issue, the European Council has issued a new directive to replace the current procedure by January 1st 2010.

Please find below the details of this new procedure called “one-stop shop”

Increased deadline to introduce reclaims

VAT refund may currently be submitted to the concerned Member State at the latest on June 30 of the calendar year following the refund period. As from January 1st, 2010, VAT refund shall be authorized at the latest until September 30 of the calendar year following the refund period. In others words, a foreign company incurring German VAT during the year 2009 could request for the reimbursement towards the German VAT authorities via the electronic portal from its Member state until September 30, 2010.

3. Reduced period to notify the decision

Timing

The directive shall apply to refund applications submitted as from January 1, 2010. It means that foreign VAT incurred by a company during the year 2009 could be refunded either via the current procedure (8th directive) if the VAT refund application form is submitted before December 31, 2009 either via the new procedure (Directive 2009/9) if the VAT refund application form is submitted as from January 1, 2010.