How does the input tax refund work in international transactions?
March 11, 2022 | 40,00 EUR | answered by Marco Schottmann
Dear tax advisor,
My name is Otto Schulze and I run a small business that regularly conducts business abroad. So far, I have not delved deeply into the topic of input tax refund for foreign transactions and therefore I am somewhat uncertain about how this process works.
Currently, I am facing the challenge that I have paid input tax for my business expenses abroad that I would like to have refunded. However, I lack the know-how to take the necessary steps correctly and ensure that I do not make any mistakes.
My concern is that I may lose money if I do not properly apply for the input tax refund or miss important deadlines. Therefore, I am looking for a clear and understandable guide on how to correctly carry out the input tax refund for foreign transactions.
Could you please explain to me how the process of input tax refund for foreign transactions works? What documents do I need to submit and who do I need to contact to apply for the refund? Are there any special considerations or pitfalls that I should be aware of?
Thank you in advance for your help.
Sincerely,
Otto Schulze
Dear Mr. Schulze,
Thank you for your inquiry regarding the VAT refund for foreign transactions. As an expert in this field, I can provide you with a detailed guide on how this process works and what steps you should take to ensure that your VAT is refunded correctly.
In general, businesses conducting transactions abroad usually pay VAT, which can be refunded under certain conditions. This process typically involves the VAT refund procedure, through which the VAT paid abroad can be reclaimed.
To carry out the VAT refund for foreign transactions, you typically need to follow these steps:
1. First, check if you are eligible for a refund. Usually, you must be a domestic company making taxable sales and have paid VAT abroad.
2. Collect all receipts for your business expenses abroad for which you have paid VAT. This includes invoices, receipts, and other documents showing the VAT amount.
3. Ensure that the invoices and documents contain all the necessary information to apply for a VAT refund. This includes your VAT identification number, the foreign supplier's VAT number, the VAT amount, and other details.
4. Submit the VAT refund applications on time. Usually, these applications must be submitted electronically through the BZSt online portal. Be sure to observe the respective deadlines, which may vary depending on the country and period.
5. Monitor the status of your VAT refund applications and respond to any queries or requests for further information from the tax authorities.
It is important to be mindful of the specifics and pitfalls when seeking a VAT refund for foreign transactions. This includes different regulations in each country, special forms or requirements to be met, as well as potential risks when applying for the VAT refund.
If you are uncertain or have further questions, I recommend seeking assistance from an experienced tax advisor who can support you in obtaining the VAT refund. A professional advisor can help you avoid potential errors and ensure that your VAT is refunded correctly.
I hope this guide is helpful to you and that you can successfully carry out your VAT refund for foreign transactions. If you have any further questions, please feel free to contact me.
Best regards,
Marco Schottmann
Tax Advisor
