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EU safeguards taxpayers' right to VAT refunds

16 July 2010, 10:47 CET
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The European Commission adopted today a proposal to postpone the deadline for the submission of VAT refund requests related to 2009 in order to give more time to taxpayers to introduce their requests for VAT refund.

In view of the late implementation by Member States of the new VAT refund procedure, which came into force on 1st January 2010, the Commission proposes giving more time to taxpayers to introduce their requests for VAT refund. At the same time, the Commission proposes harmonising some features of the national VAT refund web portals in order to make them more interoperable and accessible for taxpayers.

The VAT Refund Directive came into force on 1st January 2010 and allows for the refund of VAT on business expenses incurred by taxable persons in a Member State in which they are not established. It introduces an electronic system by which the taxable person submits his application for a refund via a web portal developed by the Member State in which he is established. Member States were obliged to make this web portal available on 1st January 2010.

However, some Member States were late in launching their web portals, whilst others have had a number of technical problems in getting them up and running. This has led to a situation in which taxable persons have not been able to submit their refund applications.

Because of these delays, and in order to safeguard the taxpayer's right to deduct VAT, it is necessary to postpone the deadline for submission of refund requests for 2009 expenses from September 2010 to March 2011.

In addition, because Member States have diverging views on the technical operation of the Directive, it is necessary to set up an efficient mechanism to harmonise certain detailed requirements in this area. For this purpose, the Commission proposes that it is granted with the power to adopt – subject to the positive opinion of the Standing Committee for Administrative Cooperation - the technical provisions that are necessary for such a pan-European scheme to be fully interoperable.


The VAT Refund Directive replaced the paper procedure for VAT refund requests which had been set out in legislation dating back to 1979. Under the previous paper procedure, taxpayers had to send original invoices to all Member States in which they incurred VAT in order to receive a refund. The new Directive aims to simplify this process and to reduce administrative burden, by introducing an electronic procedure by which the taxpayer introduces a single refund request in his Member State of establishment.

Some of the national web portals were opened very late (mid-May for the last one) and numerous complaints have been received from business pointing to divergences between the different Member States on some of the technical details relating to the practical operation of the national web portals. Several initiatives have already been taken by the Commission to agree with Member States on improvements in this area, but under the Directive the design of national web portals is entirely of the responsibility of each Member State. The Commission has strongly urged Member States to make their web systems fully operable as quickly as possible, in order to minimise negative impacts on businesses.

Text of the proposal

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