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

 Published: 06.08.2020. 16.12


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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 31 December 2020.

The provisions of Directive 2008/9 relating to the VAT refund procedure will no longer be applicable to the United Kingdom (hereinafter – UK) after 31 March 2021. 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 2020, for which a refund request is submitted to Latvia until 31 March 2021
    • All VAT refund applications that will be received from the UK before 1 April 2021 will have to be processed by Latvia in accordance with Directive 2008/9.

      In turn, after 31 March 2021, taxpayers will be entitled to a refund of VAT from Latvia for the VAT paid before 31 December 2020 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 before 1 January 2021 for which a refund request is not submitted and transferred to Latvia before 1 April 2021
    • After the actual withdrawal of the UK, UK taxpayers will be entitled to a refund of VAT from Latvia on the VAT paid before 1 January 2021, 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 
  • 3. Value Added Tax refund to taxpayers of the United Kingdom (summary)
    • VAT refund filing date

      VAT refund application period

      VAT refund application submission

      Communication and notification of a decision

      Until 31.03.2021.

       

      Until 31.12.2020.

      Electronically via the VAT refund system
      In the UK Tax Administration

      Until 31.03.2021.

       via the VAT refund system;

       

      after 31.03.2021. directly with the taxpayer via e-mail or to the legal address.

      After 31.03.2021.  when VAT refund system will not be available

      Until 31.12.2020.

      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 31.12.2020.  (based on the principle of parity, if Latvia and the UK agree on VAT refunds)

       From 01.01.2021.

      In the paper format in accordance with 13th VAT Directive 86/560, see the section VAT Refund to Legal Persons registered in 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 European Union, the UK and Latvia. Please follow the up-to-date information on the SRS website.