Value Added Tax

Frequently Asked Questions

 

 

Some Frequently Asked Questions & their answers are given below.

WHAT IS  VAT ?
WHAT EXPENDITURES ARE ELIGIBLE FOR REFUND?
WHICH COUNTRIES REFUND ?
By what names is VAT known in different countries?
Are we eligible?
How can we claim our refund?
How much is the refund amount?
When should the claim be lodged?
When will we get our refund?
DO THE VAT AUTHORITIES RETURN ORIGINAL INVOICES ?
Do I have to pay anything if we do not get any refund?

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VAT - Value Added Tax is an indirect tax on consumer expenditure. Unlike a retail sales tax, VAT is charged and collected at each stage of the production process and not only on the final sale. VAT is normally borne by the consumer in the price paid for goods and services. It is also charged on business transactions
Expenditures on which VAT is eligible for reclaim vary from country-to-country but may include hotel accommodations, car rentals, meals, petrol, conference and trade show costs, professional fees, training courses and inter-company expenditures. In Canada, GST is recoverable on hotel accommodation only.

Countries that refund: -Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Luxembourg, Monaco, Netherlands, Portugal, Sweden, United Kingdom, Canada, Iceland and Norway

Names by which VAT is known in different countries: MWST, IVA, TVA, BTW, MOMS, FPA, ALV, AFA, ADOKULES, DPH, KAIBEMAKS, MERVARDESKATT, etc.                                

Eligibility: - YES, business unit can claim the refund. Your company needs to be registered with TAX authorities in India.

Procedure: - Send us all the invoices charged with VAT and we shall immediately acknowledge the receipt. We shall inform you the amount of refund expected and the time required. We also require and authorization letter and a taxpayer certificate. Click Here for the format of the declarations required. The VAT authorities will issue a refund of VAT only if the applicant submits an original invoice from the foreign service provider. Credit card receipts, statement of charges, carbon copies, duplicate originals, "express checkout" statements and invoices which state "copy" or "duplicate" on their face are not accepted by the VAT authorities.

Amount of refunds:- Usually the rate of VAT varies from 5% to 25% of the expenses in different countries and on different products/services. This amount is refundable

Deadlines: Immediate submission of invoices minimizes the risk of rejection. Different countries have different legislation.
UK:  Indian companies must submit refund applications by December 31 for invoices dated July 1 of the previous year through June 30 of the current year.

Rest of Europe: June 30th is the deadline for all companies to file expenditures incurred between January 1 and December 31 of the previous calendar year. Note: Belgium, the Netherlands and Ireland will allow you to file retroactive claims for invoices dating back several years.

Canada: Canada has a "rolling deadline." Invoices must be submitted for refund within one year of the date that the invoice is issued.

It usually takes less than 180 days to get the refund from the date of filing the claim

Original Invoices:- The European VAT authorities do return original invoices with all paid claims. When filing for a GST refund in Canada, you must request that Revenue Canada return original invoices once the claim is paid.

"No Refund No Fee"

 

Appendix

Format of Documents Required to be Submitted with claim

Declaration no 1
Business Traveler Declaration/ Letter of Authority

< ON COMPANY LETTER HEAD>

hereby appoint European VAT refund office RETOURTAX to act in my behalf in connections with any claims I make to the European Tax authorities under current legislation as from time to time amended or replaced. Any payment of VAT to which I am entitled pursuant to any such claim made on my behalf by named agent will be paid to

European VAT refund office RETOURTAX

Authorized

Company Signatory __________________________Dated____________________

Name in Block Capital Letters: ___________________
Position Held_____________

Refunds will be issued in Indian currency, unless you instruct otherwise

Declaration No 2

Business Registration Details 

Type of Company: (    ) Corporation   (   )Partnership  (  ) Self Employed 
(   ) Limited (    ) Other

 Company Tax File number / PAN ___________________________

<This declaration needs to be attested by your local Income Tax Office>