Q&A / help

FAQ

Foreign VAT refund

What is VAT (Value Added Tax)?

- RéponseClick to collapse
VAT is a tax on consumption; it is charged on goods and services that are sold or otherwise supplied in Europe, such as: :

promotional campaigns
business trips
representative offices
technical costs and works overhead expenses (plant equipment)
cost of insuring sports events
The rate of VAT is different in each of the 27 countries of the European Union, ranging from 5% to 27% of the amount

Foreign companies can reclaim VAT, subject to certain conditions. To this effect, a claim for refund of VAT must be submitted to the competent French tax authority.
The procedure for reclaiming VAT is, in principle, reserved to companies. Companies of EU member states must therefore be in possession of a VAT registration certificate issued in the country to which they belong. Non-EU countries wishing to reclaim VAT paid in France must appoint a tax representative.

Apart from formal requirements, non-French companies may reclaim VAT paid in France, provided they fulfil two legal requirements :

do not have any permanent establishment in France
do not make transactions that are subject to VAT in France
in some cases to appoint a tax representative in the country of refund (see the following "Tax Representation" section)
in some cases a reciprocity agreement must exist between the 2 countries (see below)

There is a large number of purchases for which VAT may be reclaimed and there are significant differences between the different countries of the European Union, the rules for deductibility not being the same in all countries.


As regards refundable non-French VAT, there are 5 main types of purchases for which VAT may be reclaimed:

purchases for participating in trade fairs or events
travel and business entertainment expenses
VAT on imports
technical costs (costs of equipment, warranty, manufacturing...)
liaison office costs

European tax authorities refund VAT within 3 to 15 months of submission of the claim. The period of time prior to receipt of payment depends on when the claim is submitted and differs from country to country.

The rule for VAT deductibility differs from one member state to another, mainly on travel and entertainment expenses.


There are also notable differences in the procedures for reclaiming VAT in each country. These differences mainly concern:

periods of time before refunds are paid
the rules governing when and how VAT must be accounted for, for example, in France, for services, the date of payment of an invoice establishes when VAT is due, whereas in other countries it is the date of the invoice
documents to be submitted
restrictions on the right for reclaiming VAT for companies outside the EU: application of the principle of reciprocity, obligation to appoint a tax representative

September the 30th of the year following the due date, for claims issued by EU companies.
According to each refund country for claims issued by non EU companies.
We strongly recommend not to wait and to initiate upon receipt an invoice the VAT refund process.

Only the original invoices are accepted by the tax authorities. What must be shown on the invoice :

Invoice date
Invoice number
Name, adress and VAT registration number of the invoicing company
Name and full adress of your company
Description of goods purchased or provided services
Total amount excluding VAT
VAT rate and VAT amount
Total amount including VAT
The recipient mentioned on the importation documents must be the applicant company.

In addition somes countries as Portugal require the VAT registration number of the customer is on the invoice.

Finally some countries apply simplification rules for low amount invoices. Please contact us for more details.