The VAT paid in other EU countries is often recoverable by VAT- registered businesses in the UK, who bought goods or services for business use. The exact rules that govern the amount of VAT refundable depends on the other countries’ rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never be reclaimed on a domestic UK VAT return. There are a number of conditions which must be met in order for a claim to qualify.
Claims must be made electronically via the tax authority in which the claimant is established i.e. a claim from a UK company to any other EU country must be submitted electronically to HMRC. The deadline for the submission of a refund request for expenses incurred in other EU member, states during the 2018 calendar year is usually 30 September 2019.
However, HMRC’s guidance has been updated to make it clear that in the event the UK leaves the EU without a deal, the existing electronic process for making a claim will no longer be available to UK businesses. If you want to use the EU VAT refund electronic system to submit a refund claim for 2018, you’ll need to do so by 5pm on 29 March 2019. If there is a no deal Brexit, then claims submitted after that date will not be forwarded to the relevant EU member state.
Going forward, if there is a no deal Brexit, UK businesses will need to apply for VAT refunds from EU member states using the same existing process for businesses based outside the EU. This will apply to any outstanding claims for 2018 and for 2019.