European VAT refund

Claim a VAT refund when a non-EU company is charged VAT on business activities

Recover VAT through the VAT return

on the VAT paid for goods that will be exported outside the EU. Tourists and non-residents are entitled to VAT refunds if they meet certain conditions.

This means you can enjoy shopping in Europe and reclaim a portion of the tax paid, provided you follow the correct process and meet the necessary requirements. It's important to check the details of the VAT refund process, including documentation, minimum purchase thresholds, and deadlines.

Whether you are buying fashion, electronics, or other goods, knowing how to claim a VAT refund ensures you only pay VAT in the country where you make your purchase and can recover eligible amounts when you leave the EU.

Refund services or retailers may charge a fee for processing VAT refunds, which is usually deducted from the refund amount. The final refund amount is calculated as the VAT paid minus any applicable fees or commissions. There may be restrictions on VAT refunds, such as minimum purchase amounts, usage restrictions before export, and participation criteria for stores.

How to qualify for a VAT refund?

To qualify for a VAT refund, you must carry the purchased goods with you when leaving the EU, rather than shipping them. Always shop at stores or retailers that participate in tax free shopping schemes and can provide the necessary paperwork. VAT refunds can be claimed on purchases made at various shops and stores across the EU, but only if the retailer is registered for the scheme.

For example, if you purchase goods in France, you should process the VAT refund at the last EU country you visit before returning home. VAT rules and refund eligibility may differ for goods purchased in Ireland and shipped to other destinations. Special procedures may apply when leaving the EU via Switzerland, and travelers should obtain customs stamps before crossing the border.

For online purchases, VAT is applied based on the destination where the goods are delivered, and the VAT rate of the delivery country applies. For goods delivered across EU borders, VAT and duty are calculated based on the destination country. Duty and VAT may be payable on goods imported from outside the EU, and the trader is responsible for paying these charges.

Paying VAT and duty is required for cross-border purchases and online shopping, and travelers should be aware of these obligations. VAT refunds must be claimed within three months of the purchase date, and late claims may not be accepted.

VAT refunds generally do not apply to antiques, works of art, or collectors' items, as these have special rules. In the UK, HMRC is the authority responsible for VAT refunds, and travelers may experience delays or queues when processing refunds through HMRC.

At airports, travelers must present their paperwork to customs before or after passing through airport security, and security procedures may affect the timing of VAT refund processing. After customs clearance, travelers may need to go through security before boarding their flight, and should allow extra time for these procedures.

Introduction to Value Added Tax

Value Added Tax (VAT) is a consumption tax applied to goods and services at each stage of production and distribution within the European Union (EU) and many other countries. When you make a purchase in an EU country, the price you pay usually includes VAT, which is collected by retailers and service providers on behalf of the government. VAT is a significant source of revenue for EU countries and is designed to be paid only once, at the point of purchase.

For shoppers, especially those visiting from outside the EU, understanding how VAT works can help you take advantage of VAT refunds and save money on your purchases. Many retailers in the EU offer tax free shopping, allowing eligible customers to claim refunds on the VAT paid for goods that will be exported outside the EU.

This means you can enjoy shopping in Europe and reclaim a portion of the tax paid, provided you follow the correct process and meet the necessary requirements. Whether you are buying fashion, electronics, or other goods, knowing how to claim a VAT refund ensures you only pay VAT in the country where you make your purchase and can recover eligible amounts when you leave the EU.

Eligibility for VAT Refunds

To qualify for VAT refunds in the EU, you must meet certain conditions. Generally, you need to have your habitual residence outside the EU and make purchases from retailers that participate in tax free shopping schemes.

Your purchases must be for personal use, not for resale or commercial purposes. When shopping, always ask the vendor for a tax free form, such as the electronic DIVA tax free form in Spain, which you will need to complete and validate before leaving the EU.

The process typically involves presenting your passport, completed tax free form, and original receipts to customs officials at the airport or border when you depart. Customs will verify your eligibility and may stamp your form as proof that the goods are leaving the EU.

Some countries, like Spain, require a minimum purchase amount to qualify for a refund, so it’s important to check the specific rules of the EU country you are visiting. Look for shops displaying the “Tax Free” sign, as these retailers are registered to offer VAT refunds.

Once your paperwork is validated, you can request your refund, which is often paid directly into your bank account or provided as cash, depending on the service and country. Always keep your receipts and ensure you complete all steps before leaving the EU to avoid missing out on your refund. By understanding the eligibility criteria and following the correct process, you can maximize your savings and enjoy a seamless shopping experience across Europe.

You need to be a company in order to claim VAT refund and some countries request to have a fiscal representative to apply for the VAT recovery.

Most countries require businesses to file regular VAT returns, usually on a monthly, quarterly, or annual basis.

In general, VAT recovery through the VAT return occurs when the amount of input VAT (VAT paid on business purchases and expenses) exceeds the amount of output VAT (VAT charged to customers on sales and services)

What VAT can be refunded?

Business Expenses: VAT paid on business-related expenses such as office supplies, equipment, professional services, advertising and marketing, travel expenses, accommodation, and meals for business purposes, can often be refunded.
Business Purchases: VAT paid on goods and materials purchased for use in your business, including inventory, raw materials, and production supplies, may be eligible for recovery.
Capital Goods: In some cases, VAT paid on the purchase of capital goods, such as machinery or equipment used in your business, may be eligible for recovery. However, the rules regarding capital goods and their VAT recovery can vary between countries.
Imports: VAT paid on goods imported into your country can often be reclaimed through the VAT return, provided you have the necessary import documentation and comply with the applicable regulations.

It's important to note that not all expenses are eligible for VAT recovery. For example, VAT paid on personal expenses or expenses related to non-business activities is generally not refundable.

To determine the specific items that can be refunded under your VAT return, check with Global Trade business.

VAT recovery for non-VAT register companies - 13th Directive

The 13th Directive is a mechanism that allows businesses from outside the European Union (EU) to claim a refund of VAT paid in EU member states. It is specifically designed for businesses that are not established and do not have a VAT registration within the EU a but have incurred VAT on eligible expenses.

Under the 13th Directive, non-EU businesses need to submit a VAT refund application to the tax authorities of the EU member state where the VAT was paid. The application is typically made using a specific form provided by the tax authority.

VAT recovery for non-VAT register companies - 9th Directive

The 9th directive applies to businesses established within the EU seeking a refund of VAT paid in an EU member country. Businesses must submit their refund claims to the tax authorities of their country of establishment.

EU VAT refund process

Understand your needs and do a study

One of our VAT experts will analyse your case and see your company meets the requirement of applying VAT refund.

Our team will check all the purchase/ sales/ importation/ exportation etc to ensure the VAT application can be effective in the specific country.

Documents check

Our team will submit the application and be responsible for all the communication with the administration on behalf of your company.

Submit the VAT refund application and do follow up

Frequently asked questions

European VAT refund

France VAT

IOSS and OSS

VAT Registration

EORI number

VAT Returns

Our Services

The 13th Directive and the EU VAT Refund Directive (Directive 2008/9/EC) are both mechanisms that allow businesses to claim Value Added Tax (VAT) refunds in European Union (EU) member states. However, there are some key differences between these two directives. Here are the main distinctions:

Scope and Applicability:

13th Directive: The 13th Directive specifically applies to businesses located outside the EU that do not have a VAT registration within the EU. It is designed for non-EU businesses to claim VAT refunds on eligible expenses incurred in EU member states.
EU VAT Refund Directive: The EU VAT Refund Directive applies to businesses established within the EU, allowing them to claim VAT refunds on expenses incurred in other EU member states. It is applicable to VAT-registered businesses within the EU seeking cross-border VAT refunds.

Application Process:

13th Directive: Under the 13th Directive, non-EU businesses need to submit a VAT refund application to the tax authorities of the EU member state where the VAT was paid. The application is typically made using a specific form provided by the tax authority.
EU VAT Refund Directive: The EU VAT Refund Directive introduces a simplified and streamlined process for VAT refund claims within the EU. Businesses can apply for refunds electronically through their home country's tax authority, rather than submitting applications directly to each member state.

Under the 13th Directive, non-EU businesses can claim VAT refunds on directly related business expenses incurred in European Union (EU) member states. While the specific eligibility criteria may vary between countries, here are some examples of expenses that are commonly considered directly related to business activities:

Accommodation Expenses: VAT paid on hotel stays or rental accommodations for business purposes, such as attending conferences, trade shows, or client meetings, can typically be claimed under the 13th Directive.
Meal Expenses: VAT paid on meals or restaurant bills incurred during business-related activities, such as client meals, team meetings, or business travel, may be eligible for a VAT refund.
Transportation Costs: VAT paid on transportation expenses directly related to business activities, such as airfare, train tickets, taxi fares, or car rentals, can often be claimed under the 13th Directive.
Trade Show or Exhibition Expenses: VAT paid on expenses related to participating in trade shows, exhibitions, or conferences, including booth rentals, registration fees, promotional materials, and related services, may be eligible for VAT recovery.
Professional Services: VAT paid on professional services directly related to your business activities, such as legal fees, consulting fees, or marketing services, may be eligible for a VAT refund.
Business Entertainment: VAT paid on entertainment expenses incurred for bona fide business purposes, such as client entertainment events, team-building activities, or business-related social functions, might be eligible for VAT recovery.

The documentation requirements for claiming VAT refunds can vary between countries and depend on the specific rules and regulations of the tax authority where you are submitting your VAT refund application. However, here are some common types of documentation that are often required:

Valid VAT Invoices: You will typically need to provide original VAT invoices or receipts for the expenses on which you paid VAT. The invoices should include the necessary details, such as the supplier's name and address, your business's name and address, the invoice date, a unique invoice number, a description of the goods or services, the VAT rate applied, and the amount of VAT paid.
Proof of Payment: You may be required to provide evidence of payment for the expenses on which VAT was paid. This can include bank statements, credit card statements, or other forms of payment documentation that demonstrate the payment was made.
Import/Export Documentation: If you are claiming VAT refunds on import or export transactions, you may need to provide additional documentation such as customs declarations, shipping documents, import/export licenses, or proof of export.
Proof of Business Purpose: Some tax authorities may require you to provide evidence that the expenses for which you are claiming VAT refunds were incurred for business purposes. This can include supporting documents like travel itineraries, conference agendas, or contracts that demonstrate the business nature of the expenses.
VAT Refund Application Form: You will likely need to complete a VAT refund application form provided by the tax authority. The form will require you to provide information about your business, VAT registration details, the reporting period for which you are claiming the refund, and details of the eligible expenses.

Please note that the specific documentation requirements can vary significantly between countries. Some countries may have more stringent requirements, while others may have simplified procedures for VAT refund applications.

Talk to one of our experts in order to expand the business in the most efficient way.

Ready to get started?

Global Trade Business provides the smartest solutions and simplest procedures at the highest standard.

Connect with us

Book a call

European VAT refund

Recover VAT through the VAT return

How to qualify for a VAT refund?

Introduction to Value Added Tax

Eligibility for VAT Refunds

What VAT can be refunded?

VAT recovery for non-VAT register companies - 13th Directive

VAT recovery for non-VAT register companies - 9th Directive

What are the differences between the 13th Directive and the EU VAT Refund Directive?

What VAT can be refunded under 13th Directive?

What documents are required for claiming the VAT refund?

Talk to one of our experts in order to expand the business in the most efficient way.

European VAT refund

Recover VAT through the VAT return

How to qualify for a VAT refund?

​

Introduction to Value Added Tax

​

Eligibility for VAT Refunds

​

What VAT can be refunded?

VAT recovery for non-VAT register companies - 13th Directive

VAT recovery for non-VAT register companies - 9th Directive

What are the differences between the 13th Directive and the EU VAT Refund Directive?

What VAT can be refunded under 13th Directive?

What documents are required for claiming the VAT refund?

Talk to one of our experts in order to expand the business in the most efficient way.