Tourism is a booming economic sector and countries encourage consumption by eliminating some taxes. In many cases, there is ignorance regarding how to request the refund of vat paid abroad,an information that will be clarified below.
First of all, it must distinguish between the refund of VAT under the travellers’ regime,for tourists who can access the so-called “Tax Free”, and the refund of intra-Community VAT,for entrepreneurs who have paid an invoice whose VAT corresponds to another member state of the European Community.
How to manage VAT recovery on travel
The people who can deduct this type of VAT are those who can access the “Tax Free”,that is, travelers who habitually reside outside the European Union.
This VAT refund to foreigners does not affect other European citizens because they are considered to be part of the same economic framework, so this right is reserved to non-EU foreigners, who will have to request the refund at the last airport before leaving the European Community.
This right is held only by people – not companies – who have bought objects to give away or for their personal use for a total value exceeding 90.15 euros. These assets have to leave the European Union within a maximum period of three months.
There are several ways to manage your VAT refund.
- Depending on the first option, you will have to seal the invoice -you have to take into account that the ticket is not useful, only a complete invoice will be accepted- at customs before checking in the luggage and sending it back to the store,which will have a period of 15 days to return the VAT and recover it later by presenting the Form 303 or the Model 308.
- To carry out the second alternative, you must purchase goods worth more than 90.15 euros in a store with “Tax Free” that issues an invoice with VAT and fills in the Tax-Free check with your data. Then you will only have to stamp the invoice at customs and collect VAT at an exchange office or an Authorized Collaborating Agency – such as Travel Tax Free or Global Blue – while the store will recover the amount by presenting Form 303 or Model 348.
The DIVA is a new electronic system that has been implemented by the Tax Agency so that travelers can manage the VAT refund,so that the relevant bureaucratic procedures can be streamlined.
This system will be implemented gradually as businesses and “Tax Free” operators join the initiative.
Steps to process the refund of intra-community VAT
This VAT refund is valid for entrepreneurs established in Spanish territory who pay an invoice with VAT in other member states of the European Union or for entrepreneurs established in the Canary Islands, Ceuta or Melilla who pay an invoice with VAT in the Peninsula.
To be eligible for this refund, you must be in possession of a NIF and a digital certificate,as well as be registered in the Enabled Electronic Address and request the refund of an amount of at least 400 euros in case of quarterly application or 50 euros in case of annual application.
Next, you will have to submit the Form 360
within a period that begins the day after the calendar year or quarter and ends on September 30 of the following year.
After this procedure, it will be the Tax Agency that will have to assess within four months if it meets the requirements to receive the relevant refund. If yes, it will also be the Tax Agency that will be responsible for sending the application to the corresponding community state.
Then it will be the Administration of the corresponding country that will be in charge of approving the application or, if necessary, asking you to send the necessary documentation or information. If the application is approved, the VAT refund period will be ten days from that moment.
By submitting the Form 360, you will have already provided the data of the bank account where the corresponding amount will be deposited.
Another aspect that you should keep in mind is that the conditions for requesting a VAT refund may vary depending on the country. Denmark and Cyprus only allow a partial refund and countries such as Austria, the United Kingdom and Latvia also accept invoices issued in the name of the employee.
These are the general guidelines for requesting a VAT refund,
both in the case of non-EU travellers and in the case of entrepreneurs belonging to the European Community. In both cases, having this data can be useful to avoid misinformation and not lose an amount that can be recovered through some bureaucratic procedures.