Who is eligible for refund under the 13th VAT directive and conditions precedent


Who is eligible for refund under the 13th VAT directive and conditions precedent

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VAT is a mutli-stage sales tax paid by a customer for the goods he purchases.


Under the EU 13th VAT directive if one is conducting business in an EU country where one is not established and is charged VAT on these activities, then one becomes entitled to get a EU VAT refund


The scenarios in which the claim will not be processed are if one is not a taxable person for purposes of VAT, when one makes only exempt supplies, or when one is already covered by special scheme for small businesses or last when one falls under the flat rate scheme for farmers.


The conditions that some EU countries impose are that no refund will be granted if the claimant’s country does not offer mutual rights to people from the EU countries. Also, there may be restrictions on the type of expenditure and last thing that could happen is that the claimant may be asked to hire a tax representative.


So in these tough circumstances, what one has to do to ensure getting an EU VAT refund is to first of all provide a proof of residence, such as passport from a country which is not an EU country or a residence permit. Secondly, the goods in question are to be removed from within the EU limits within 3 months of being purchased and there needs to be a proof of the same in the form of a stamped VAT refund document. Third of all the EU sets a definite minimum limit of the value of goods and the value shouldn’t be below this benchmark and finally it depends on the retailers whether they will give you the said refund or appoint an intermediary for reimbursing and a fee might be charged and after deduction of the fee from the refund amount the remaining will be paid to you.