How do you reclaim VAT on EU purchases from 1 January 2021?
This is a freeview 'At a glance' guide to reclaiming VAT on business expenses in the EU.
How to reclaim VAT on purchases abroad: refunds of VAT incurred by UK businesses in the EU from 1 January 2021.
Under the Thirteenth VAT Directive (86/560/EEC) UK businesses that incur VAT in EU countries are able to claim refunds of that VAT from the relevant member state.
- Since 1 April 2021, UK registered businesses have not had access to the EU electronic portal unless they are registered in Northern Ireland.
- EU VAT claims must now be made using the previously existing process for non-EU businesses.
- This process varies across the EU. It is necessary to follow the procedure set out by the country to which the claim relates.
- Member states have their own special requirements: details can be obtained from the relevant tax authority.
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It may be necessary to provide a certificate of status when making a claim. This can be obtained from HMRC.
Am I eligible to make a claim?
A UK business can make a VAT claim from an EU country if the business:
- Is not based in any EU country or territory.
- Does not make any supplies in the country where the VAT was incurred unless the supplies are:
- Exempted transport and ancillary services.
- Supplies to customers liable for payment of the related VAT under the reverse-charge mechanism.
Country-specific conditions
Each EU country may:
- Refuse to refund VAT under the procedure if the UK does not grant reciprocal refund rights for VAT to businesses based in that EU country.
- Restrict the type of expenditure qualifying for VAT refunds.
- Require the claimant to appoint a tax representative.
Useful guides on this topic
Importing goods into GB from 1 January 2021
The post Brexit transition period ended on 31 December 2020. HMRC has issued guidance for importing goods.
Place of supply: Goods
The place of supply (POS) of goods determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.
Place of supply: Services
The place of supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.
EU VAT e-commerce package: From 1 July 2021
On 1 July 2021 a number of European Union (EU) VAT changes took effect, including the introduction of two new One Stop Shops. What are the changes? Who is affected?
External links
HMRC:
- Refunds of UK VAT for non-UK businesses or EU VAT for UK businesses (Notice 723A)
- How to claim a refund of VAT paid in an EU member state
- Get confirmation from HMRC that you are trading in the UK
European Commission:
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