The value-added tax is an indirect tax included in the price of the goods or services by the manufacturer or the seller and paid by the buyer in EU. VAT automatically is included in your account, for example, when buying goods in shops or when getting accommodation in a hotel. The rate of the given tax can make from 8 up to 27 % depending on the country. On the
site of the European Commission you can get a more detailed information on the VAT rates for different goods and services in the European Community countries.
It happens every time when your employees go abroad for training, negotiations, participation in seminars, workshops, exhibitions, conferences, etc. Your company pays their stay at the hotel, transport charges, meals, phone calls, training, presentation charges, etc. You may not notice the extra charge, but you always pay 10-25 % more. The majority of the services (works, goods) for foreigners include VAT which can be refunded.
The procedure of the company’s VAT refund is determined by the law of the foreign countries, including the Thirteenth Regulation (86/560/ЕU) of the European Commonwealth Council on the member states legislation harmonization of November, 17, 1986 which provides the VAT refund for the subjects of entrepreneurial activity from non EU member states. Norms of the specified Regulation are also true to the Russian companies and those of the CIS countries.
Foreign companies can refund VAT buying the goods and services included in the following big list. The foreign VAT refund can be done for the following basic kinds of services:
- Accommodation (hotels, motels, apartments, etc.);
- Meals (restaurants, cafe, snackbars);
- Hire of motor transport, yachts, a taxi;
- Training, seminars, workshops, conferences;
- Petrol, diesel fuel, motor transport repair;
- Consulting, marketing, legal and some other services,
- Exhibition areas provision,
- Offices and other premises rent,
- Participation in conferences, seminars, workshops and trainings;
- Other representation and business services.
The answer to this question is positive if your company meets the following criteria:
First, the company should be registered as the VAT payer not in the EU country where they claim the refund. That is practically any Russian company registered as the VAT payer in Russia, Belarus, etc., meets this criterion.
Second, the company does not do any constant commercial activity in EU, and has no fixed establishment (office) for realization of economic activities in the EU territory.
And third, the company does not deliver the goods, does not render services in territory of the corresponding EU country except for the goods and services for which the VAT is paid by the receiver/ customer.
The countries from which the VAT refund is possible: BELGIUM, PORTUGAL, DENMARK, AUSTRIA, FINLAND, SWEDEN, FRANCE / MONACO, NORWAY, GREAT BRITAIN, the NETHERLANDS, IRELAND, CANADA, ICELAND, LUXEMBURG, MALTA, BOSNIA AND HERZEGOVINA. The countries where your company meets all the conditions established for VAT refund by the Thirteenth Regulation of EU and other national normative acts that regulate the VAT refund procedure.
Three simple steps have to be made to get the VAT refund:
- To fill in the registration form and apply the originals (!) of accounts or contact employees of “MarkPrior” company to learn the possibility of VAT refund and to agree on the convenient time for carrying out the sample and preparing the necessary documents.
- To sign the contract, to receive the ready forms which meet the VAT refund specificity requirements in every country on behalf of your organization.
- To receive the refund on your account.
Do not hesitate and send us all your foreign accounts / cheques where the VAT was withheld, and we shall help you to get back up to 25 % of all business of expenses you have made abroad.
If you have lost the accounts or there are some mistakes in the accounts, we can help you in correcting them and making new ones that meet the equirements of foreign tax bodies.
In most of the countries, the application for last fiscal year should be sent to tax services within 6 months from the moment of its end. As a rule, the beginning and the end of fiscal year coincide with the beginning and the end of a calendar year, i.e. the VAT refund applications for the previous year should be sent till June, 30. However in Great Britain where fiscal year for non-residents of the European Community is established from July, 1 till June, 30 - applications should be sent till December, 31.
Please, note that the VAT refund applications preparation, including the examination of the accounts attached to the application takes certain time. Therefore, you should contact us and submit the VAT refund application not later than 1 month before the expiration of the established deadlines.
As a rule, the application is submitted once a year in compliance with the submission terms and defrays business charges of your company for accounting fiscal year. The application is submitted to tax services of every foreign country where you have made business charges. The tax laws of some countries allow to submit applications more often, that is up to 4 times a year, but only 1 application for a three-month term.
Under the tax laws of most of the countries the VAT refund applications should be considered and a decision whether to satisfy it or not should be made within six months from the moment of their submission. In some countries this term can differ. From our experience we can say, that the VAT refund applications are considered within 4-6 months, in rare cases during a longer term.
The VAT refund is made in Euro. However, if the state is not in the eurozone, the VAT refund can be made in the national currency. The refunded amount on the client’s choice is transferred to the settlement account of the company or to the “MarkPrior” settlement account and then is transferred to the client.
The commission is charged only on a successful basis and its size makes 15 % of the refunded sum. Thus the bank commissions connected with the transfer and currency converting fall to the account of the Client.
