Revenue Note for Guidance
This section deals with VAT refunds to foreign traders in other Member States. It implements Council Directive 2008/9/EC, which was adopted on 12 February 2008 and came into force on 1 January 2010. This Directive provides for an electronic refund procedure for foreign traders. The main features are:
(1) Subsection (1) contains definitions.
(2) Revenue is empowered to refund applicants for VAT they paid on supplies they received in the State or on imports of goods into the State, where a proper application from the applicant’s Member State (MS) is received.
(3) The rules on calculating the amount of refund are set out in subsection (3):
(4) Refund claims must be made electronically by the applicant through the dedicated portal set up in the applicant’s own MS.
(5) There is provision for the making of a correcting application when the deductible proportion calculated under subsection (3)(b) subsequently changes.
(6) The timing rules and tax details required on applications in the case of refunds to be made by Revenue are as follows:
(7) There are two de minimis rules:
(8) Revenue must notify the applicant electronically if they decide not to forward his/her refund application to another Member State on the grounds that the applicant is not entitled to a refund.
(9) Subsection (9) sets out the actions taken by Revenue on receipt of a refund application.
(10) Revenue is allowed to deduct bank charges from refund payments that they make, at the applicant’s request, to another MS.
(11) Applicants must repay, with interest, refund amounts that were overpaid because of incorrect claims.
(12) Revenue will withhold the payment of a refund where the applicant owes money in respect of an earlier overpayment.
(13) Revenue must pay simple interest at the daily rate of 0.011% (see section 105(4)) in respect of amounts not refunded on time. Interest is not payable where information requested by Revenue is submitted late or is incomplete.
(14) The refund rules in the section do not apply in cases where the applicant should be registered for VAT in the Member State of refund. For example, if a German business supplies goods and services into Ireland, it would normally be obliged to register in the State, unless the supplies are to customers that are liable under the reverse charge rules – in this case, it won’t have to register in Ireland as the recipient is accountable and liable.
The subsection provides that applicants supplying goods and services that are deemed to be supplied in the refund Member State are excluded from the refund scheme, except in the case of reverse charge supplies, supplies under the special scheme for telecommunications services, broadcasting services and electronically supplied services (Union scheme) or exempt transport.
Relevant Date: Finance Act 2019