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Deadline extended to file for foreign VAT refunds

19 Jul 2010

Further to the introduction of the VAT package, new VAT rules apply for the refund of foreign VAT borne by Luxembourg businesses (so-called 8th Directive procedure).The deadline to submit refund requests has been postponed to allow for electronic systems to be working efficiently. Taxand Luxmebourg discusses what businesses should be doing in order to be compliant.

Luxembourg companies are no longer required to file refund requests with the foreign VAT Authorities. This is good news as the process was very administrative and time consuming. Since 2010 (requests relating to the year 2009), such refund requests must be filed electronically via the Luxembourg authorities portal. Refund requests can be filed by the business directly or via a mandate granted to a tax advisor.

Taxand's Take

It is no secret that the set up of the new system lead to practical difficulties and that the portals of several EU Member States currently do not work efficiently.

The right to deduct input VAT is however crucial for economic operators in order to preserve the neutrality of the VAT system. It has therefore been decided to postpone the deadline to submit VAT refund requests for the year 2009 from 30 September 2010 to 31 March 2011.

For Luxembourg companies, filing an application for the refund of foreign VAT requires access to the electronic system (called "eTVA") even if a mandate is given to a tax advisor. The access to eTVA itself requires the possession of a Luxtrust certificate, a certificate that is not currently held by all businesses. Considering the numerous requests the different authorities are currently facing, proceedings are likely to take some time. We therefore suggest taking the necessary steps as soon as possible to file refund requests on time. Past 31 March 2011, refund requests for the year 2009 will no longer be accepted.

Your Taxand contacts for further queries are:
Christophe Plainchamp
T. +352 26 940 280

Nicolas Devillers
T. +352 26 940 204

Taxand's Take Author