EU Issues Report on Procedures for VAT Refunds in Member States

The European Union on May 10 published a report on its member states’ procedures for domestic and cross-border value-added tax (VAT) refunds, including for VAT on imports. An EU directive issued in 2006 entitles importers and other purchasers of goods subject to VAT in a member state other than the country where they are established to a refund of that VAT if the goods or services are used for certain purposes. According to the report, 20 EU member states fully comply with the directive, but eight countries -- Germany, Italy, Latvia, the Netherlands, Poland, Portugal, Romania, and Spain – have procedures that don’t meet EU requirements. For example, Germany turns down some VAT refunds without explanation, while in some other countries, including Italy and Spain, national authorities can turn down VAT refund requests without explanation.