Global Tax Adviser, June 07, 2016. Canadian business that may be eligible to recover value-added tax (VAT) paid to many European Union (EU) member countries will need to file a claim by June 30, 2016. In many cases, VAT paid in 2015 may not be recoverable if the required documentation is not filed with the respective EU authority by this date.
Canadian companies doing business in the EU are often required to pay local VAT charges. VAT is usually charged on purchases and costs incurred locally within an EU country. This charge applies not only to commercial goods for further distribution or consumption but also to hotel costs and other travel expenses, as well as certain services. Furthermore, VAT is normally charged on imports from non-EU member countries.
In many EU countries, taxpayers may generally recover the VAT charged on purchases and costs related to their businesses under a 13th Directive VAT claim, even if they are not registered for VAT in a particular country as a foreign taxpayer. However, certain restrictions may lead to unrecoverable VAT, including whether a reciprocity agreement is required, the nature of the business, and the nature of the costs.
The deadline in most EU countries for a 13th Directive VAT claim for 2015 is June 30, 2016. For this reason, Canadian businesses with potential EU VAT claims should act quickly. In many EU countries, missing this deadline could lead to unrecoverable VAT.
For more information, contact your KPMG adviser.
Information is current to June 07, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500