VAT Update

Tax and VAT refunds subject to compliance with declaration submission provisions

The Tax Department issued a notification on 11 September 2020 in relation to the refund of VAT/tax. The notice clarifies that any refundable tax or VAT will not be returned where a person has omitted to submit the declarations as provided for by both of the following Laws:

  • Assessment and Collection of Taxes Law N.126(I)/2020
  • Value Added Tax Law N.122(I)/2020.

Any application by a taxable person for a tax or VAT refund will be declined if that person has failed to submit all their declarations. Upon subsequent compliance by the applicant, a new refund application will need to be submitted where this is required in accordance with the provisions of current Law.

We note that this change in policy is important especially when combined with the recent changes which limit the right to apply for a VAT refund to 6 years, as any delay arising from the aforementioned provisions may render a subsequent refund application overdue. More information on the 6 year limitation and other recent VAT developments may be found here.