Irish Revenue Issues New EU VAT Repayment Guide

by Jason Gorringe, Tax-News.com, London

23 September 2009

The Irish Revenue has released details of a new electronic VAT payment and reimbursement system that is due to come into force in Ireland, and across Europe, to ease the administration of VAT on intra-community transactions from January 1, 2010.

All traders who are registered for VAT in Ireland are obliged to submit a form VAT 3 at regular intervals to the Collector General’s Division. The VAT 3 form contains figures reflecting the transactions carried on by the trader, including the amounts of VAT charged on sales and purchases. Any imbalance between these two figures indicates either a payment of tax due from the trader to Revenue or a repayment due from Revenue to the trader.

If a trader whose business is established in Ireland incurs VAT in another EU State, the trader may be able to reclaim it by making a claim to the tax authorities in that other EU State. Similarly, if a trader established in another EU State incurs VAT in Ireland, they may be able to reclaim it by making a claim to the tax authorities in Ireland. This facility simplifies the VAT recovery procedure for all traders and facilitates Intra-community trade.

Currently, all claims must be prepared and processed manually. The Unregistered VAT Repayments Section of the Collector General’s Division, in River House, Limerick, has responsibility for processing claims from traders in other EU States for repayment of VAT incurred in Ireland.

Significant new EU legislation will come into effect on January 1, 2010. This will affect the treatment of VAT and the process for refunding VAT to businesses. As well as introducing new rules with regard to the place of supply of services, the new Directive provides for the introduction of a new electronic VAT refund procedure for Intra-community claims.

The new Directive will allow traders and/or their agents/representatives to submit applications for the refund of VAT incurred in another EU State electronically from January 1, 2010. The electronic application will have to be made to the claimant’s national tax authority in the first instance and that national tax authority will then forward it, electronically, for processing to the EU State where the VAT was incurred.

In order to facilitate the new system, the Revenue's Online Service will provide a new Electronic VAT Refund (EVR) portal, and Irish applicants/agents wishing to submit an application for a refund of Intra-community VAT must use this facility. An applicant (or agent) who already files VAT returns on ROS will automatically be able to file electronic VAT refund applications using the EVR portal from January 1, 2010.

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