Foreign VAT borne by Luxembourg businesses - Deadline extended to file a refund application for the year 2009

As you may know, further to the introduction of the VAT package, new VAT rules are applicable for the refund of foreign VAT borne by Luxembourg businesses (so-called 8th Directive procedure).

Luxembourg companies have no longer to file refund requests with the foreign VAT Authorities via a very administrative and time consuming procedure. Since 2010 (requests relating to the year 2009), such refund requests must be filed electronically via the portal of the Luxembourg authorities. Refund requests can be filed by the business itself or via a mandate granted to a tax adviser.

It is no secret that the set up of the new system lead to practical difficulties and that the portals of several EU Member States currently do not work efficiently.

The right to deduct input VAT is however crucial for economic operators in order to preserve the neutrality of the VAT system. In this respect, it has been decided to postpone the deadline to submit a VAT refund request for the year 2009 from 30 September 2010 to 31 March 2011.

For Luxembourg companies, filing an application for the refund of foreign VAT requires in practice access to the electronic system of the VAT Authorities called “eTVA”, even in the case where a mandate is given to a tax advisor. The access to eTVA itself requires the possession of a Luxtrust certificate, a certificate that is not currently held by all businesses. Considering the numerous requests the different authorities are currently facing, proceedings are likely to take some time. We therefore suggest taking the necessary steps as soon as possible to be able to file refund requests on time. Past 31 March 2011, refund requests for the year 2009 will no longer be accepted.