Applying for VAT and ED refunds from abroad can be stressful. Find out how to simplify the process and maximize your claims.
Value Added Tax, or VAT, is a tax that applies broadly to all goods and services bought and sold for use or consumption in the European Union.
VAT on expenses commonly paid throughout the EU by trucking and transportation companies, such as fuel, road taxes, parking, spare parts purchase, and certain professional services may be refundable.
Excise duties, or ED, are taxes charged on the sale or use of specific products (such as energy used for heating and transport), the revenue for which goes entirely to the country in which they are paid.
Excise duties incurred abroad (within Europe) on diesel are partially refundable for trucking and transportation companies in certain EU countries. These countries include Belgium, France, Italy, Croatia, Slovenia, Hungary and Spain.
Each year, millions of Euros in tax refunds are left unclaimed by businesses who are either unaware of how to file an application for refund from abroad, or find the process too difficult.
Both VAT and ED refund claim applications can involve multiple countries, and each application may have different deadlines and required documentation. Keeping track of what, when, and where to file can be a daunting task for even the most well organized business.
All 27 EU member states, as well as the UK and Norway offer a mechanism for claiming a refund on VAT paid. However, some countries do not allow refunds for certain categories of expenditure. Depending on whether or not your business is established in an EU country, different rules may apply regarding where you must file your application for a VAT refund.
For EU Based Businesses:
VAT refunds must be claimed online via the authorities in the country where a business is based. If you are eligible for a refund, the authorities will pass on your claim to the authorities in the other country. This process is standardized between countries at the EU level.
For Non-EU Based Businesses:
If you are charged a VAT based on activities in an EU country, Great Britain, or Norway, you may still be entitled to a VAT refund from the national tax authority in that country. In this instance, you must submit your refund claim directly to the authority in the country where you incurred the VAT. Some countries will only issue a refund if the country where your business is based offers a similar refund arrangement.
Each country has its own legislation for which types of individual documents are accepted. While there are a number of restrictions on the application of simplified tax documents, all countries will accept regular invoices. In some cases, additional documents may be requested to support your application.
For EU clients, an application for a VAT refund must be submitted by the end of September in the following calendar year. For example, applications with documents issued in 2021 must be submitted no later than September 30, 2022. For non-EU clients, there are different deadlines with regard to the requirements of the country of refund. Also, the deadline for refund applications issued by Great Britain is different from the deadline for EU countries.
For ED refund applications there is no single applicable due date, as each of the 7 countries listed previously has its own deadline for filing these claims. More information on applicable due dates and reporting periods can be obtained through the tax authority for each individual country.
Keeping track of the multiple tax authorities, deadlines, and required documentation involved with VAT and ED fees incurred on an annual basis could cause undue administrative burdens for international trucking and transportation companies of any size. To add to this issue, delays in the receipt of reimbursements due can cause severe cash flow problems. Many companies simply don’t have the time, manpower or knowledge to devote toward filing all of the necessary claims.
Even if your trucking or transportation business is familiar with all of the applicable laws and regulations, filing an application for a VAT or ED refund claim from abroad can still be a long and stressful process. Fortunately, Eurowag offers its clients professional services to help manage their tax needs.
Commercial vehicle drivers in Europe need to pay tolls in multiple countries, each with its own requirements and payment methods. Eurowag helps trucking and transportation companies easily pay and manage these tolls with just a single on-board unit (OBU).
In addition, the use of a Eurowag fuel card can help keep track of all of your expenses paid for certain tolls, refueling, vehicle maintenance, parking and more. It even offers discounts and exclusive prices for fuel and tolls. Having all your VAT and ED expenses paid through a single service makes the refund claim process much faster and simpler. However, you don’t need to be a fuel card holder to take advantage of Eurowag's VAT and ED refund services.
Eurowag professional client service benefits include the following: