Paweł Cabaj
Head of Business Development
Operating a successful business in a dynamically evolving legal and tax environment, particularly in the context of international business operations and VAT settlements within the European Union, involves numerous challenges. Companies operating across different countries incur expenses that include VAT; however, recovering this tax often proves to be a complex process. As a result, many businesses fail to take full advantage of the opportunities offered by VAT refunds.
KR Group provides comprehensive support in the recovery of both domestic and foreign VAT, assisting clients at every stage of the process, from assessing the possibility of recovering VAT, through the preparation and submission of refund applications, to communication with tax authorities.
VAT refund – for whom
The VAT refund service is dedicated to companies that incur VAT-related expenses in Poland or abroad and wish to recover overpaid tax in a secure and compliant manner. This particularly applies to businesses engaged in international operations, purchasing goods and services in other EU countries. especially within the Central and Eastern European region, or participating in cross-border transactions.
Where a company is established in one European Union Member State and incurs VAT-bearing expenses in another EU country, it may apply for VAT recovery under the VAT refund procedure, in accordance with the provisions of Directive 2008/9/EC (the so-called 8th Directive). This procedure enables businesses to recover foreign VAT without the obligation to register for VAT purposes in the respective country, provided that all formal requirements and deadlines are properly fulfilled.
For entities established outside the European Union, the provisions of the 13th Directive (86/560/EEC) apply, regulating the minimum rules governing VAT recovery within EU Member States for non-EU businesses.
Support from KR Group, as a trusted business partner, is particularly valuable for organisations that do not possess local tax expertise in a given jurisdiction, have limited internal resources to manage VAT recovery procedures, or encounter difficulties in identifying eligible expenses. The service also addresses the needs of businesses operating in sectors such as transport, logistics, manufacturing, e-commerce, and services, where the scale of foreign VAT expenditure is significant.
VAT refund at KR Group
KR Group’s experts conduct a comprehensive analysis of completed transactions, assessing them from the perspective of VAT registration obligations in a given country, identifying opportunities to recover overpaid VAT, and providing full support throughout the VAT refund process. Particular attention is given to identifying invoices that should be excluded in order to minimise the waiting period for VAT reimbursement.
Appointing an experienced tax adviser as a representative in tax proceedings ensures that communication with the tax authorities is conducted professionally and efficiently. This significantly increases both the effectiveness of the process and the likelihood of obtaining a successful refund. Documentation collected during proceedings, as well as correspondence with tax offices, is handled in the official language of the country in which the VAT refund is being claimed. Without professional support, businesses may unknowingly forfeit the opportunity to recover substantial amounts of VAT.
Thanks to many years of cooperation with our international partners, KR Group supports VAT recovery not only in the countries where we maintain direct operations (Poland, Hungary, Romania, the Czech Republic, and Slovakia), but also across other European Union jurisdictions.
VAT refund – KR Group offer
- Comprehensive support in the recovery of VAT in Poland and foreign VAT refunds (EU VAT refund procedures).
- Identification of costs and transactions eligible for VAT recovery.
- Preparation and submission of VAT-REF applications and VAT refund claims within EU countries.
- Verification of accounting documentation for compliance with local VAT regulations.
- Monitoring of the VAT refund process.
- Communication with tax authorities in Poland and abroad.
- Representation in administrative proceedings related to VAT recovery.
- Advisory support in the area of VAT compliance processes.
- Review of VAT documentation and implementation of required corrections based on the data provided.
- Preparation of appropriate VAT registers in accordance with local VAT regulations.
- Preparation and submission of monthly VAT returns and reports.
- Ongoing support from VAT experts regarding regulations across the EU and CEE region.
Support with registration procedures, including VAT, Intrastat, EORI, OSS, and IOSS.
FAQ
Why entrust KR Group with VAT refund services?
KR Group combines many years of experience in international VAT compliance and cross-border tax settlements, supporting both large capital groups and companies operating across multiple jurisdictions. KR Group’s experts support businesses from sectors such as: e-commerce, manufacturing, logistics and transport, real estate, and international services, where foreign VAT recovery constitutes an important element of financial liquidity management.
Does KR Group support companies in recovering VAT within international operations and e-commerce?
Yes, KR Group supports companies in recovering VAT within international business operations, e-commerce, and cross-border sales across the EU and CEE countries. The scope of services includes analysis of VAT recovery opportunities, preparation of VAT-REF applications, and management of communication with tax authorities. Thanks to our experts’ experience in international VAT, the VAT recovery process is tailored to the specific nature of online business operations.
What does the foreign VAT refund procedure (EU VAT refund) look like and how long does the process take?
The foreign VAT refund procedure, referred to as the EU VAT refund process, involves the preparation and submission of an application to the relevant authority together with a complete set of documents confirming the incurred expenses. Each European Union country applies its own deadlines and formal requirements; therefore, proper preparation of the application at the submission stage is essential.
VAT Refund – when should businesses consider it?
Companies may recover VAT relating to goods and services purchased domestically, imported goods, as well as expenses related to domestic and international business travel. There are numerous opportunities to recover VAT that maximise reimbursement potential, and the resulting savings may amount to nearly 30% of incurred expenditure. This is precisely why businesses should actively consider VAT recovery opportunities.
When applying for a VAT refund, businesses should verify whether they are subject to VAT registration obligations in a given country. Failure to register for VAT and properly account for output tax may negatively affect the outcome of a VAT refund application and may even result in penalties and increased interest on outstanding tax liabilities. Such circumstances may lead not only to VAT arrears but also to corporate income tax liabilities.
By excluding invoices that do not provide the right to deduct VAT, businesses reduce the duration of tax proceedings, which directly translates into a shorter waiting period for VAT reimbursement.
Who is eligible for a VAT refund?
Under the provisions of Directive 2008/9/EC, the VAT refund procedure is available to taxpayers established within European Union Member States who, during the refund period in the refund Member State:
- did not have a registered seat or fixed establishment from which business transactions were carried out, or, in the absence of such establishment, did not have a permanent address or habitual place of residence there;
- did not supply goods or provide services deemed to have been supplied within the refund Member State (subject to certain exceptions).
Entities established outside the European Union may also apply for VAT refunds under the principle of reciprocity. However, this principle does not apply to entities that have submitted notification of their intention to use special VAT procedures.
Who is VAT refund intended for?
If you are an entity paying VAT on goods or services acquired in other countries, you have undoubtedly considered how to recover this tax efficiently. You are likely aware that applications may be submitted in the country of establishment under EU directives. In theory, the process appears relatively straightforward. However, our practical experience demonstrates that this is only the tip of the iceberg. Proper preparation is essential.
KR Group provides comprehensive support in VAT recovery under:
- Council Directive 2008/9/EC (formerly the Eighth Directive);
- Council Directive 86/560/EEC (the Thirteenth Directive).
What does VAT refund for EU-Based companies look like (8th Directive)?
A company may apply for a VAT refund under the 8th Directive where it is a VAT taxpayer in its country of establishment but is not registered for VAT purposes in the country where the VAT was incurred, and where it has not supplied goods or services subject to taxation in the country where the VAT was paid (subject to specific exceptions relating to certain transport services and transactions covered by the reverse charge mechanism).
What does VAT refund for Non-EU companies look like (13th Directive)?
For companies established outside the European Union, VAT refund rules are governed by the 13th Directive (86/560/EEC). To qualify, the company must neither have a registered seat nor be VAT registered in the EU Member State where the VAT was incurred during the refund period covered by the application, and it must not have supplied goods or services within that country.
A fast and secure VAT refund process requires compliance with additional conditions dependent on local regulations within individual Member States. As a result, the VAT refund process requires detailed analysis and proper preparation of documentation.
