Overseas VAT refunds

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Overseas VAT refunds
  • Refunds to EU businesses
  • Reclaiming UK VAT
  • Refunds to non-EU businesses
  • Procedural change regarding certificates of status

This guidance note provides an overview of the procedure that needs to be followed if an EU or non-EU business wishes to obtain a refund of VAT incurred in an overseas country where it is not VAT registered or is required to be VAT registered in that country.

The procedure was significantly changed in 2010 and the new rules are covered below. Further information on the changes that occurred in 2010 can be found in the following HMRC publication:

Click here to view pdf

Refunds to EU businesses

The EU VAT refund system is still generally called the ‘8th Directive’ (EU resident businesses) or ‘13th Directive’ (non-EU businesses) refund system, even though the procedure was radically reformed in 2010 and new EU legislation has replaced the 8th Directive.

2008/9/EC ; VATA 1994, s 39; VROBP1000; SI 1995/2518, regs 173–184; VAT notice 723A 

An electronic system must be used by an EU business seeking an EU VAT refund for all claims submitted from 1 January 2010. Under the current system, the EU claimant will complete an electronic refund application which will be dealt with by the EU member state where the VAT refund is being reclaimed. The claimant will need to ensure that they meet the refund requirements laid down by the EU member state where they have incurred the VAT.


Applicants must meet the following conditions. The business:

  • must not be VAT registered, or be liable / eligible to be VAT registered, in the EU member state where they have incurred the VAT
  • must have no fixed establishment, place of business, seat of economic activity or residence, etc in that EU member state
  • must not have supplied goods or services in that EU

More on Foreign VAT refunds: