Reclaiming VAT within EU

[Anonymous]

Hi.
I am hoping to get some advice on this issue. We have a UK group VAT registration, including the holding company of the group (under the statutory structure). There is also a Hungarian subsidiary which has a Hungarian VAT registration and premises.
A lot of travel is done to Hungary by the UK employees, incuring Hungarian VAT on hotel bills etc. The UK subsidiary does not make any supplies to Hungary, nor has a Hungarian VAT registration nor has premises in Hungary itself. However as it is part of a larger group which does, does this mean we can’t reclaim this Hungarian VAT?
HMRC website seems quite vague on the subject of groups in this situation.
Thanks in advance for any guidance.
Alison

[Marie Stein]

Hi Alison
To begin with, I assume for the purposes of this query that the UK group registration is “fully taxable”, ie it is entitled to recover all of the input tax in incurs in the UK because it’s supplies are taxable, not exempt? This means that all of the companies in the group are regarded as “taxable persons” for VAT purposes.

I agree that HMRC is pretty vague on the subject of group registrations and EC and it’s because it doesn’t really make any difference when applying for EC VAT refunds. Group registrations are allowed under the EC VAT Directive but not all countries use them. Based on what you’ve said, it sounds to me as though the UK subsidiary should be entitled to make a claim based on the normal rules. It will have to apply for a “certificate of VAT status” to submit with its claim (Form VAT 66) and this will be in the name of the representative member of the group, not the individual company. You might want to include a copy of the list of group members with the VAT 66 form when you submit the claim to the Hungarian tax authorities to confirm that the company for whom the claim is being made is part of the registration covered by the VAT 66 certificate.

I’m not aware of any problems when making claims for companies who are registered as part of a VAT group, although I’ve never sent a claim to Hungary before. Hope you don’t have any problems with it, good luck with the new electronic refund system!

As always, if you need specific advice I’d be happy to help through my formal consultancy services, – just drop me an email using teh contact form.
Marie

[Author]

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