Concerning options for saving taxes, the SORAINEN Tax & Customs Team reminds you that the deadline for reclaiming VAT paid abroad is approaching. That is, 30 September is the last date for applying to recover VAT paid abroad in 2013.

Procedure

The system for reclaiming VAT has been simplified for taxpayers from 2010, and applications to recover VAT paid in other EU Member States can be filed in the EDS system of Latvia. As to VAT paid in third countries, a claim can be filed in compliance with the procedure set in those countries. Usually, the respective third country form and source documents are sent in paper form by mail.

What is VAT repaid for?

EU Member States repay VAT paid in a member state for business purposes. For example, a VAT refund is often possible if costs have been incurred during a business trip, or transportation costs, and the like. VAT can also be repaid for purchase of goods and services, for example, housing guests in hotels, fees for conference participation and the like. In turn, some EU Member States partially return or do not return VAT for car hire and fuel costs.

What is VAT not repaid for?

EU Member States usually do not repay VAT for goods and services related to real estate and its purchase, or goods and services that are personal or meant for entertainment, or for services provided by tour agencies and operators. So it is important to clarify in advance what the options are for reclaiming VAT on particular goods and services in EU Member State or third countries.

Amounts

VAT is returned if the amount of VAT repayable is at least EUR 50 in any year.

Countries where VAT repayment can be claimed

All EU Member States, as well as Iceland, Norway, Switzerland and Monaco.

Documents to be filed

As to repayment of VAT paid in other EU Member States, the following must be filed with the SRS:

  1. application for repayment of VAT in compliance with Cabinet Regulations No. 1514 of 17 December 2013, available in the EDS;
  2. scanned invoices, cheques, receipts and other documents that confirm receipt of goods and services in another member state (if the price for the goods and services in the invoice exceeds EUR 1,000, or for fuel if the product price in the invoice exceeds EUR 250);
  3. customs declarations, if any;
  4. confirmation that the company has not performed business operations subject to VAT in that member state.

Documents confirming payment are not filed together with the application, but you must be ready to file them at the request of the tax administration.

For repayment of VAT paid in third countries, the following must be filed in the country concerned:

  1. application for repayment of VAT (forms are available on the home pages of the tax administrations concerned and are comparatively easy to complete; translations into the local language are usually not required);
  2. invoices for goods and services purchased in the third country or customs declarations, if the claim is for VAT paid at the moment of import;
  3. a statement from the SRS as to the VAT payer’s status in Latvia (VAT certificate) – not older than 1 year;
  4. documents confirming payment (in some countries these documents are not required).