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VAT refund procedure & Brexit - loss of VAT refunds due to expiry of deadline approaching!

23 February 2021

As a result of the exit agreement between the EU and the UK, applications for VAT refunds relating to periods in 2020 must be submitted by 31 March 2021. Rather than ending after nine months, as was previously the case, the application period will already expire six months earlier. This has also been pointed out again by the German Federal Central Tax Office (BZSt) in a letter dated 9 February 2021.

For entrepreneurs who can claim VAT amounts in the UK for the year 2020, this means that action needs to be taken. Conversely, the shortened deadline also applies to entrepreneurs from the UK who wish to claim German VAT amounts in the refund procedure.

For VAT amounts incurred after 31 December 2020, the VAT refunds must be applied for directly with the British tax authorities (HMRC) and no longer through the BZSt. Concerning the intra-Community trade with Northern Ireland, however, the VAT refund procedure will remain the same as before.

In the reverse case, if an entrepreneur from the UK seeks refund of German VAT, his electronic application must be submitted directly to the BZSt. The application period for VAT refunds arising in 2021 is six months, i.e. until 30 June 2022.

You will find more information on this topic in our web seminar from 29 January 2021.

Would you always like to stay up to date in the area of VAT? Take advantage of our monthly web seminars and our Tax and Legal Update.