Value Added Tax refund to taxpayers of the United Kingdom in case of Brexit scenario

 Published: 16.04.2019. 16.42


Sub menu

After Brexit the United Kingdom (hereinafter – UK) will become a third country (or a country outside the European Union (hereinafter – EU)). At the moment it is not clear whether the UK leaves the EU without a deal or with a deal.

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (hereinafter – Directive  2006/112) and Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State (hereinafter – Directive 2008/9) provisions will no longer be applicable to the UK after Brexit.

The provisions of Directive 2008/9 relating to the VAT refund procedure will no longer be applicable to the UK after Brexit. Considering that the UK will become the third country to be covered by Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonization of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in Community territory (hereinafter – 13th VAT Directive 86/560), all VAT refund requests that will be received from the UK will be treated as VAT refund applications from a third country that can be submitted in accordance with the procedures established in Latvia.

Accordingly, the electronic VAT refund application will no longer be available to request refunds of VAT paid in Latvia.

  • 1. About VAT paid until 31 December 2018, for which a refund request is submitted to Latvia until Brexit
    • A refund request can still be submitted by the taxable person of the UK in the beginning of 2019, in accordance with Directive 2008/9.

      All VAT refund applications that will be received from the UK before Brexit will have to be processed by Latvia in accordance with Directive 2008/9.

      In turn, after the actual withdrawal of the UK, taxpayers will be entitled to a refund of VAT from Latvia for the VAT paid before Brexit and to receive a refund under Directive 2008/9, but the application itself will have to be submitted under the Thirteenth Directive 86/560 and in accordance with the rules applicable in Latvia that will have to guarantee the right to refund in respect to VAT paid by 31 December 2018.

  • 2. About VAT paid from 1 January 2019 until Brexit or VAT paid before 1 January 2019 for which a refund request is not submitted and transferred to Latvia before Brexit
    • After the actual withdrawal of the UK, UK taxpayers will be entitled to a refund of VAT from Latvia on the VAT paid by Brexit, i.e. to obtain a refund of VAT paid between 1 January 2019 and Brexit or VAT paid before 1 January 2019, UK taxable persons will have to use the only available procedure for VAT refund requests, i.e. the national procedure implementing the 13th VAT Directive 86/560 and taxable persons established in the UK will have to request the VAT refund in Latvia in accordance with the procedures applying to refund requests submitted by taxable persons from third countries (see the section VAT Refund to Legal Persons registered in Third Countries https://www.vid.gov.lv/en/vat-refund-legal-persons-registered-third-countries) 
  • 3. Value Added Tax refund to taxpayers of the United Kingdom in case of the Brexit scenario (summary)
    • VAT refund filing date

      VAT refund application period

      VAT refund application submission

      Communication and notification of a decision

      Not later than 15 days before Brexit

       

      (so that the UK tax administration could transfer the application to Latvia before Brexit)

       

      Until 31.12.2018.

      Electronically via the VAT refund system
      In the UK Tax Administration

      before Brexit via the VAT refund system;

       

      after Brexit directly with the taxpayer via e-mail or to the legal address.

      After Brexit when VAT refund system will not be available

      01.01.2019.- Brexit

       

      until 31.12.2018. (if electronic VAT refund application has not been submitted before Brexit)

      Documents to be submitted in the paper format:
      - the form;
      - an original certificate of VAT because the VIES system is not available;
      - copies of invoices.

       

      Address for sending documents:

      The Non-resident and Other Tax Data Credibility Assessment Division of the State Revenue Service of the Republic of Latvia Tax Board

      Talejas iela 1,

      Rīga, LV-1978, Latvia

       

      Non-resident Tax Data Credibility Assessment  Division  Tax Board
      State Revenue Service
      1 Talejas Street
      Riga, LV-1978
      Latvia

      directly to the taxpayer via e-mail or to the legal address.

       


       

       

      The UK as a third country

       

      After Brexit  (based on the principle of parity, if Latvia and the UK agree on VAT refunds)

       After Brexit

      In the paper format in accordance with 13th VAT Directive 86/560, see the section VAT Refund to Legal Persons registered in Third Countries https://www.vid.gov.lv/en/vat-refund-legal-persons-registered-third-countries

       

       

       


      The information provided in this material may change at any time depending on legislative acts, recommendations, guidelines and other documents adopted by the EU, the UK and Latvia. Please follow the up-to-date information on the SRS website.