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)
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
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
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)
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.