European Commission warns Romania on VAT recovery
- 12 July 2014 | Richard Asquith
The European Commission has formally requested Romania to improve its VAT recovery process of face sanction.
The reasoned opinion from the EC, the step before proceedings at the European Court of Justice (ECJ), states that the time to repay claims under the EU 8th VAT Directive take in excess of six months. This is far in excess of the average time taken by other member states.
Romania must now reply to the EC or face a referral to the ECJ after 60 days.
Reclaiming VAT under 8th Directive
EU companies may reclaim VAT incurred in another EU member state under the guidelines set by the 8th Directive. This dictates the administration and requirement that governments may impose on claimants, which includes speedy repayments of justifiable claims. In 2010, the EU VAT Package simplified the process enormously by enabling companies.
Non-EU companies looking to recover VAT suffered in an EU state may instead file a reclaim through the 13th Directive.