EU VAT Refunds Before Brexit No-Deal

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If the UK leaves the EU without a deal many UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.

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.

If you have incurred overseas VAT elsewhere in the EU during 2018 then you will, in the event of a ‘no-deal’ Brexit, no longer be able to submit these claims via the UK portal. HMRC is urging businesses to submit these claims before 29 March 2019, rather than waiting for the normal deadline of 30 September 2019. Refund claims for VAT incurred in 2019, and remaining 2018 VAT not claimed before 29 March 2019, will have to be submitted to the individual countries concerned in the same way as non-EU businesses must, and be subject to any particular rules and conditions applying in that country.

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.

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