VAT refund in the European Union (EU) is provided by Directive 2008/9/EC and Cabinet Regulation No.1514 – Procedures by which a Person Taxable with Value Added Tax shall Submit an Application for Receipt of a Tax Refund in Another Member State of the European Union and Procedures by which Value Added Tax shall be Refunded to a Taxable Person of Another Member State of the European Union.
Recovery system for VAT paid in other EU countries is simplified and similar in all Member States. Latvian VAT payers must submit refund applications to the SRS Electronic Declaration System (EDS) adding a list of tax invoices and separate scanned invoices where the transaction value exceeds EUR 1000 (for fuel – 250 EUR). By contrast, VAT payers of other Member States may submit a request for Latvian VAT refund in their tax administration.
If VAT is recoverable in several Member States, for each Member State is to be filled a separate VAT refund application. The minimum amount to be recovered for a year is 50 EUR. Tax refund requests may also be submitted for the quarter if the tax amount to be recovered is not less than 400 EUR.
The main criterion for tax refund is the connection of particular costs with the taxable transactions. It should be noted that there are several Member States where there are restrictions on the deduction of input tax on fuel or car repair expenses and other restrictions. VAT payer of another Member State will be able to receive a tax refund only for the expenditures for which the right to deduction of input tax is granted to local VAT payers.
We would like to remind you that Latvian VAT payers have the right to reclaim the tax paid on maintenance costs (for example, office rent, office expenditures, accounting services, etc.) of representative offices (the representative offices without the right to carry out economic activities) of other Member States. Similarly, VAT payers of other Member States are entitled to request a VAT refund in Latvia for maintenance costs of representative offices registered in Latvia.
In all EU Member States the deadline request for refund of the previous year is September 30 of next year. Thus, Latvian VAT payer may submit a tax refund request for the year 2014 no later than 30 September 2015.
Relatively extensive information in Latvian, English and Russian about refund request process to Latvian VAT payers in other EU Member States is provided in the website – link, about VAT refund process to VAT payers of other EU Member States – link, about VAT refund process to VAT payers of third countries – link.
Contacts of Tax Advisory unit
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