FAQ: “How Long Does the VAT Reclaim Process Take?” Everything You Need to Know About Foreign VAT Reclaims in Europe
As a business owner, if you’ve been paying VAT on business expenses abroad, you might be eligible for a foreign VAT refund. While the potential for reclaiming VAT can be highly beneficial to your business, many entrepreneurs find themselves wondering: How long does the VAT reclaim process take?
In this FAQ article, we’ll break down the typical timeline for processing VAT claims, discuss the factors that influence the processing time, and offer tips to help speed up the process so you can get your VAT refund as quickly as possible.
How Long Does the VAT Reclaim Process Take?
The VAT reclaim process involves several stages — from submitting your receipts and documents to the tax authorities to receiving your refund. The time it takes to process your claim can vary depending on a few factors, such as the country where the VAT was paid, the complexity of the claim, and the tax authority’s efficiency.
On average, most foreign VAT claims are processed within 2 to 7 months. Some countries, like France and Austria, may have a quicker turnaround, while others, such as Greece or Italy, may take a little longer. However, the key thing to remember is that the sooner you submit your claim, the sooner you’ll receive your refund.
Let’s break down the stages of the process to give you a clearer understanding of where time is spent:
- Document Submission and Review
Once you submit your VAT receipts and supporting documentation, the first step is for the VAT reclaim service (or tax authorities) to review your submission. During this phase, all receipts are checked for accuracy and compliance with local VAT regulations. Incomplete or incorrect documents can delay the process, which is why it’s essential to ensure everything is submitted correctly the first time.
- Processing by Tax Authorities
After the initial review, your documents are sent to the relevant tax authorities for processing. In the EU VAT Refund System, each country is responsible for processing claims from businesses based outside its borders.
Once submitted, tax authorities will verify the details and check for any discrepancies. This stage usually takes around 2 to 4 months, but it can vary depending on the specific country and the time of year. For instance, countries that process claims in bulk (such as after the end of a fiscal quarter) may have a backlog, leading to longer processing times.
- Refund Decision and Payment
If the tax authorities approve your VAT claim, they will issue a refund. This is typically transferred directly to your bank account. The final payment may take several weeks to process, depending on the country’s administrative systems.
What Factors Affect the Time It Takes to Process a VAT Reclaim?
While the general timeline for foreign VAT reclaims is between 2 to 7 months, there are several factors that can affect the overall duration of the process:
- Country-Specific Regulations: Different countries have different processing times and regulations for VAT refunds. For example, countries like Germany have a more streamlined process, whereas France and Italy may take longer due to additional steps in their verification processes.
- Complexity of Your Claim: Claims for large sums or those involving multiple receipts may take longer to process, especially if there are discrepancies or unclear details in the submitted documents.
- Tax Authority Backlogs: During peak periods (e.g., at the end of the year or during tax season), tax authorities may have a backlog of claims, which can delay processing times.
- Accuracy of Your Documents: If any of your submitted documents are incomplete or incorrect, it could delay the process significantly. Ensuring that your receipts meet all legal requirements can help speed up the process.
How to Speed Up Your VAT Reclaim Process
While the VAT reclaim process is largely dependent on the efficiency of tax authorities, there are a few steps you can take to speed up the process:
- Submit Your Documents Early: The earlier you submit your VAT receipts, the sooner your claim will be processed. Waiting until the last minute can cause delays, especially if there are issues with your submission that need to be corrected.
- Ensure All Documents Are Complete and Accurate: Double-check your receipts for completeness and accuracy. Any missing information or discrepancies can slow down the process.
- Work with VAT Reclaim Experts: Partnering with a VAT reclaim expert or service provider can help ensure that your claim is submitted accurately and in compliance with each country’s specific regulations. Experts are also familiar with how to handle disputes or rejections, which can prevent long delays in case of complications.
Is There Anything I Can Do If My Claim Is Delayed?
If your VAT claim is delayed, the best approach is to stay in contact with your VAT reclaim provider or the tax authorities. In some cases, additional documentation may be required or there may be delays due to a backlog. A VAT expert can help you navigate these challenges and follow up with the authorities on your behalf to ensure a smoother process and even request for an additional interest % on the delayed accepted claim.
The Sooner You Submit, the Sooner You Get Paid
While the VAT reclaim process can take between 2 to 7 months, the most important takeaway is that timing is crucial. The sooner you submit your receipts, the sooner you’ll receive your refund. By working with VAT reclaim experts, ensuring your documents are accurate, and staying proactive, you can ensure your refund is processed efficiently and with minimal delays.
Got more questions about the VAT reclaim process? We’re here to help!
To determine your potential VAT refund and learn how VATcube can help your business, take advantage of our free VAT assessment. Simply contact us through our FREE VAT Assessment form and our team will be happy to assist you.
Send us your VAT receipts today, and we’ll make sure you get the refund you deserve — without the stress.