VAT refund to the company registered in the EU

By filing the request in the member nation where the person conducts trade and utilizes the digital system, a taxpayer who is not dealing in Latvia submits the request for the VAT return. 

In 2013, the revised Value Added Tax Act became effective. The VAT reimbursement to registered organizations in Latvia is issued in line with the appeal for the return filed in the country where the citizen conducts trade, as stated in Section 2 of the Tax laws. The other participating state’s levy agency digitally transmits the petition to the national tax office.

The authorized representative of the taxpayer

A natural or corporate entity operating on behalf of a taxpayer who has been given authorization may also file a request for a VAT return. The authorization must be issued in that member nation and in accordance with its local regulations because the rebate demand is made in the EU where the payer conducts trade.

VAT refund criteria 

If the taxable person within the refunding term satisfies the following requirements, VAT will be refunded.

  • He was listed in another Union country’s taxable individual record;
  • He has not conducted any business in Latvia that, under the law, requires registration;
  • He is not listed in the National Taxation Service’s dutiable people Registry;
  • He hasn’t provided any goods or services in the Republic of Latvia; and
  • He has not engaged in any further chargeable activity in Latvia.

Eligibility for refund

To be entitled to a refund you must be both:

  • A taxpayer listed in another EU State; and
  • Involved in a corporation that is established in Latvia. 

You must also give the necessary materials, such as identification documents, and business information. Depending on the level of VAT or the type of business, the authorities may additionally want extra documentation.

Requirements 

The requirement for the request application is as follows: 

  • The request must be in English;
  • The return term specified in the request should not be less than three months
  • The returning term must not be longer than one year;
  • The request needs to be submitted by a certain deadline;
  • The requested VAT rebate sum must be stated in EUR;
  • The petition must include a digital copy of tax invoices;
  • Description of business activity must be provided;
  • Details about each bill generated in the homeland must be included in the request; and
  • The requested tax cashback must be at least EUR 50.

The following codes for products and assistance provided must be accompanied by additional digitally coded details:

  • Traveling means;
  • Tools;
  • Hotels or accommodations;
  • Meals;
  • Fuel; and 
  • Luxuries. 

Tax invoice 

If a form includes the date it was issued, the invoicing code, the supplier’s title, and the registered address, it is considered to be a tax invoice. It is also necessary to enter the supplier’s reg number from the State Tax Register. To be regarded as a tax invoice, documentation must include the recipient’s name, the tax level, the transaction amount, any discounts, and the number of products.

Decision timeline 

Four months after receiving the appeal, the National Tax Agency contacts the other Participant State’s responsible body of its judgment to approve or reject the request. That agency then tells the petitioner of the outcome.

Request rejection

When the tax rates listed on the invoice do not meet the standards outlined by the act, the application is typically refused. Additionally, the activity that has not yet occurred cannot be reimbursed. 

The purchase of underused household real estate may be another important factor. The refusal also results from domestic services provided for real estate construction, rebuilding, remodeling, or maintenance.

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