At last! VAT, that great pan-European tax, is coming of age.
If you are a VAT-registered business the principle has always been that input VAT you suffer should be recoverable, regardless of where it’s incurred. But most businesses have found the process of reclaiming VAT suffered outside the territory in which they’re registered an absolute nightmare. For a UK-registered trader to recover VAT from Italy, or Germany, wherever, has involved foreign language skills, an exceptional ability to interpret complex forms unique to each territory, and extraordinary levels of forebearance and tenacity – and a willingness to face defeat with equanimity. Most simply give up – the sums involved aren’t worth all the stress and hassle. Life is just too short.
No longer! Finally, 37 years late, a new regime is being introduced that will enable you to register your claims for cross-border input VAT through a web portal operated by the Revenue Authorities of your own territory. In theory, you won’t need multi-lingual skills, and once logged, your claim will actually need to be addressed by the relevant Revenue Authority. If they procrastinate or prevaricate, they’ll end up paying you interest on top of your (valid) claim.
The new regime should come into effect from 1 January 2010, and it will cover cross-border input VAT from 1 January 2009 on. So now’s the time to start recording all that VAT you thought you’d never get back.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
If you would like to discuss how this applies to you, we would be delighted to talk to you. Please make contact with the author on the details shown below.
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