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Status 1 July 2021: Notices on value added tax (VAT) refund procedures after the United Kingdom withdrawal from the EU (Brexit)

The United Kingdom has left the EU at the end of 31 January 2020. You had to submit refund applications for periods regarding calendar year 2020 according to the Council Directive 2008/9/EC of 12 February 2008 until 31 march 2021. Applications relating to refund periods from 2021 onwards must be submitted in accordance with the rules for VAT refund to businesses from third countries.

Exception for Businesses established in Northern Ireland:

The agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community and the Northern Ireland Protocol includes special arrangements for trade in goods which remain valid beyond 31 March 2021. Businesses established in Northern Ireland must submit refund application concerning VAT on goods according to Council Directive 2008/9/EC of 12 February 2008.

The rules for VAT refund to businesses from third countries shall apply for reimbursement of VAT on services.

Status 28 October 2020: Amended provisions on the date by which corrected invoices must be submitted

If you have submitted an invoice that does not meet the regulations of Sec. 14 Par. 4 Umsatzsteuergesetz (i.e. VAT Act), and VAT is therefore not refundable, you have the possibility to have the invoice corrected by the invoice issuer and to reclaim VAT refund from the corrected invoice.

You can find here what you have to observe from now on in the event of an invoice correction:

I. In which cases do you have to apply for VAT refund from the corrected invoice for the refund period in which the service was received and the invoice was first issued?

The correction to an invoice shall take effect from the date on which the service was received and the the invoice was first issued if the following details are already included in the original invoice:

• invoice issuer (= service provider / supplier),
• invoice recipient,
• specifications of services,
• remuneration (= taxable amount) without VAT and
• separately shown VAT.

After the correction of the invoice, the VAT refund must be reclaimed for the refund period in which the service was received and the invoice was first issued (Part 15.2a Par. 7 Umsatzsteuer-Anwendungserlass (i.e. VAT Application Decree)).

Please note:
The VAT refund from an invoice that has been corrected retroactively can only be granted if no finality has yet occurred at the relevant refund period. Therefore, if you need to have an invoice corrected retroactively, you should, as a precautionary measure, lodge an appeal against the decision rejecting the refund from the original invoice in order to meet the deadline.

Transitional provision:
If the corrected invoice is received by the invoice recipient by 31 December 2020, it is also possible to reclaim the VAT for the refund period in which the invoice issuer corrected the invoice in accordance with Sec. 31 Par. 5 Umsatzsteuer-Durchführungs-verordnung (i.e. VAT Implementing Regulation). You do not have to submit the corrected invoice retroactively to the refund period in which the invoice was first issued.

II. In which cases do you have to apply for VAT refund from the corrected invoice for the refund period in which the invoice was corrected?

If an invoice is incomplete in one or more of the following characteristics, its correction shall not retroactively effect the date on which the service was received and the invoice was first issued but takes effect from the time of correction:

• invoice issuer (= service provider / supplier),
• invoice recipient,
• specifications of services,
• remuneration (= taxable amount) without VAT and
• separately shown VAT.

After the correction of the invoice, the VAT refund must be reclaimed for the refund period in which the invoice issuer has corrected the invoice and the invoice recipient has received the corrected invoice (Part 15.2a Par. 7 Umsatzsteuer-Anwendungserlass (i.e. VAT Application Decree)).

III. How to correct an invoice

There are three possibilities for correcting deficient invoices:

1. Correction made directly on the invoice
   
   Every correction made directly on the invoice must be confirmed by the issuer of the invoice with his company stamp, date and signature. In the case of an invoice correction, the changed data must still be visible on an invoice. Over-sticking of data by means of stickers or overwriting is not permitted.

2. Issue a document that is clearly and specifically related to the invoice to be amended
   
   

   The document is clear and specific to the invoice to be amended, if the consecutive number of the original invoice is indicated in this document. The document must comply with Sec. 14 Par. 4 Umsatzsteuergesetz (VAT Act), i.e. it must contain in particular the date of issue. However, a new invoice number for the amending document is not required.

3. Issue a new invoice with date of reissue
   
   A new invoice may be issued, which must contain a clear reference to the original invoice.

Application

Every EU Member State has set up an electronic portal by which registered businesses established in that Member State can submit their applications. These applications must be received by no later than 30 September of the calendar year following the refund period.

Please contact the competent authority of the Member State in which you are established if you have questions about the process of electronically submitting applications for the VAT refund procedure.

Eligible applicants

You can participate in the VAT refund procedure if you meet the following requirements:

• You are registered in an EU Member State as a business for VAT purposes.
• You have neither your headquarters nor management in Germany.
• You have no fixed establishment in Germany from which supplies of goods and services subject to value-added tax are made in the territory of the country.
• You are not registered in Germany for VAT purposes.

• You make no transactions in Germany with the exception of

  • supplies of goods and services for which the purchaser or customer must pay VAT or
  • transactions that are subject to individual transport assessment or
  • intra-Community acquisitions and then associated supplies of goods as part of intra-Community triangular transactions, or
  • services that fall under the mini one-stop shop provision.

Refund period

Refund periods must include at least three consecutive calendar months in a calendar year. They may not exceed one calendar year. The period can be less than three months if the period is the remaining period of a calendar year.

The periods of applications may not overlap. Exception: If you have submitted a refund application for the calendar year or for the last period of the calendar year, you can submit one other refund application for that calendar year. The only VAT amounts that can be included in this application are VAT amounts that are not included in past refund applications that were effectively submitted.

Minimum amount

The refund that is applied for must be at least EUR 400. The refund that is applied for must be at least EUR 50 for refund periods that include the calendar year or the last period of the calendar year.

Preferences

In the preferences, EU Member States regulate certain national particularities in the application procedure. The following applies to Germany:

• Subcodes are not required.
• Scanned original receipts (invoices and import receipts) are to be transmitted electronically if the taxable amount (excluding VAT) is at least EUR 1,000. The threshold is at EUR 250 for fuel invoices.
• NACE codes are required.
• Accepted languages are German and English.
• Applicants can give accountants or agents permission to act for them. In this case a power of attorney must be submitted.
• Payments to third parties are possible if the applicant provides a power of attorney to receive money (payment instruction).

Completion of processing

After the application is processed, the applicant or the applicant’s agent will receive notice about the decision that was made. The notice will then be dispatched to the address indicated in the application.

Forms