Foreign VAT refund- Refund of VAT paid in an EU member state

If a Hungarian entity acquires goods or services abroad, or VAT liability arises on the importation of goods, without performing taxable activity in the various countries of the European Union, yet local VAT is still charged to the company, the entity becomes eligible to reclaim the charged or payable VAT.

The application for foreign VAT refund should be submitted by EU companies in their country of establishment. In addition to EU Member States, VAT paid abroad can also be refunded from the following non-EU countries based on Reciprocity Agreement with the EU in respect of foreign VAT refund: United Kingdom, Switzerland, Liechtenstein, Norway, Turkey, and Serbia. The only difference is that the request for refunding the VAT paid in these countries must be submitted directly to the tax authorities of the state concerned by the refund and cannot be submitted in the country of residence. Likewise, for a company established in one of the aforementioned non-EU countries, the entity must also directly submit the request to the Hungarian Tax Authority for refunding the VAT paid to Hungarian suppliers or the Customs Authority.

After submitting a refund request, local authorities generally ask for supplementary information, so it is important to ensure that the relevant documents are submitted within the deadline. Indeed, the foreign VAT refund has a limitation period and if the company fails to comply with the statutory deadline or the deadline for supplementary information, or does not submit the relevant documents, the local authorities will easily refuse the VAT refund application.

To whom do we recommend our services?

To Hungarian companies that do not perform taxable activity abroad but have to pay a high amount of VAT to foreign suppliers or tax authorities, and would like to request VAT refund If a Hungarian entity does not perform a taxable activity in the various countries of the European Union (or in Switzerland, Liechtenstein, Norway, Turkey, and Serbia), but it is charged local VAT due to the acquisition of a product or service abroad or a product import resulting in payable VAT, it becomes eligible to reclaim the charged or payable VAT. Refund of VAT paid in an EU member state
For companies in the above countries that have paid the Hungarian VAT rate on their purchases in Hungary
To entities that are capable of completing the forms and proceeding with the administration on their own but doing so would take up a disproportionally long time
To companies that have already attempted a foreign VAT refund but the foreign authority has refused the request for some reason

How can we help?

Forvis Mazars assists Hungarian companies in refunding foreign VAT and even coordinates VAT refunds in multiple countries by providing a complex service. Similarly, Forvis Mazars helps the Hungarian VAT refunds of Swiss, Liechtensteinian, Turkish, Norwegian, and Serbian companies.
Forvis Mazars has a dedicated VAT specialist team that performs tasks related to foreign VAT refund with high efficiency and significant professional experience.
Forvis Mazars performs its work for a competitive success fee, therefore it only issues invoices, if the Client has received the VAT refund. In addition, in the case of an observation or appeal, the many years of experience of Forvis Mazars’ international audit and tax advisory network is at your disposal.
Forvis Mazars’ Tax and Legal Department is always available for assistance, consultation or advice in any topic.

Should you have any questions about our foreign VAT refund services, please contact our colleagues directly or through your Tax Advisor at Forvis Mazars.