VAT Refund from Abroad - KSG GLOBAL SERVICES

Reclaiming VAT from Abroad

VAT refunds from EU countries can be an important financial tool for your company. To facilitate international trade and optimize your financial flows, understanding and managing DDS recovery processes is essential.

What is a VAT Refund from Abroad?

VAT reclamation allows Bulgarian companies registered for VAT in Bulgaria to recover taxes paid in other EU member states during commercial or business activities. This means that if your company has purchased goods or services from another EU member state and uses them in Bulgaria for business activities that allow for tax relief or reimbursement, you can request a refund of the VAT you paid.

Conditions for VAT Refund:

The company applying for a refund must be registered for VAT in Bulgaria.
The company should not be registered for VAT or have made taxable sales in the country from which it is seeking a VAT refund.
Invoices clearly showing the paid VAT must be provided to support the claim.

Process for Submitting a VAT Refund Application:

Applications for VAT refunds are submitted entirely electronically through the National Revenue Agency’s (NRA) e-services portal. A qualified electronic signature is required to certify the submitted documents and ensure transaction security.

Important Deadlines:

When you submit a VAT refund application, the NRA has up to four months to review and process your request. This period can be extended by another two months if additional documents or information are requested by the member state from which you are seeking a refund.
It is important to note that the total processing time cannot exceed eight months. This maximum period includes the initial processing time by the NRA and any additional time needed by foreign tax administrations for further checks and decisions.

Processing and Decision Procedures:

Once you submit your VAT refund application, the NRA begins reviewing and processing the submitted documents. After completing this initial phase, the NRA forwards the necessary information to the competent tax authorities in the EU country from which you are seeking the VAT refund. This process may involve information exchange and additional clarifications between different tax offices, which can delay the final decision deadline.

Rules for VAT Reclamation

VAT cannot be reclaimed if the tax was charged incorrectly. This means that if the tax laws of the country from which you are seeking a refund do not provide for VAT on the respective goods or services, the refund cannot be processed.
You must present all relevant documents proving the VAT payment. If such documents are missing, the refund application will be rejected.
If the purchased goods or services are not directly related to your company’s core activities, the VAT refund will not be approved. It is important to prove that the goods or services were used for business purposes that entitle you to a tax credit.

Appeals

All decisions related to VAT refund denials can be appealed to the relevant authorities. This allows companies to challenge the decision if they believe they have met all conditions and have the necessary documentation.
The appeal process must be carried out within the established deadlines set by the tax authorities.

It is crucial for companies to be well-informed about their rights and obligations during the VAT reclamation process, as well as to strictly adhere to the prescribed deadlines and procedures. In case of uncertainty or need for specialized assistance, it is advisable to consult with an accountant or tax consultant.

Conclusion

In the VAT reclamation process from abroad, it is important to emphasize that a proper understanding and management of these procedures can significantly improve your company’s financial health. By investing time in learning the correct steps and complying with deadlines and requirements, you increase your chances of successfully reclaiming substantial amounts that can be reinvested in your business development.