German non-EU VAT recovery sent to European Court of Justice
- Sep 24, 2014 | Richard Asquith
The European Commission (EC) has referred Germany to the European Court of Justice over its requirements for non-EU VAT recovery.
If a foreign company is conducting business in Germany, it may incur German VAT on expenditure such as hotels, restaurants, taxis, hire of equipment etc. If the company is tax registered in their own country, then they should be able to recover this German VAT through a quarterly claims process. EU companies use the 8th Directive regime via their special online portals, whilst non-EU companies use the 13th Directive through a paper recovery filing.
Germany insists that non-EU company directors must sign their 13th Directive VAT recovery claims, and do not allow companies to agents or other parties. There is no similar requirement for EU companies. The EC has deemed this discriminates against non-EU companies. It originally warned Germany in September 2012 that its rules would have to change. Since no action was taken, the EC has sent the cast to the ECJ, the highest court of appeal for EU legal matters.