Changes in the system of VAT refund since 1st April 2013
Since 1st April 2013 there is a legislative change regarding the system of VAT refund to natural persons from the third countries according to the Act No 502/2012 Sb. (Coll.) – an amendment to the Act No 235/2004 Sb. (hereinafter “Act on VAT”).
The amended Act does not include any more the duty to fill in, hand in and confirm the form No 25 5235 MFin 5235. Yet, since 1st April 2013, the seller is obliged to issue a paper on demand of a foreign natural person to give him/her an evidence for the sale. The paper will be issued in two identical counterparts. On the first counterpart there will be the sign “VAT REFUND”, and on the second counterpart the sign “COPY” (see § 84 subsection 3 of the amendment to the Act on VAT). Except for these two signs: “VAT REFUND” and “COPY”, both counterparts will be identical and equal, and they will be regarded as a proof for the sale of goods.
Export VAT refund to natural persons from the third countries after 1st April 2013
Since 1st April 2013 there is a legislative change regarding the system of VAT refund to natural persons from the third countries according to the Act No 502/2012 Sb. (Coll.) and § 84 of the Act No 235/2004 Sb. – Act on VAT (hereinafter “Act on VAT”).
The customs office is the body competent to confirm the export of goods (the date, the fulfilment of all duties as well as the exported goods themselves). Therefore, the customs office issues the following information regarding the VAT refund changes:
The amended Act does not include the duty any more to fill in, hand in and confirm the form No 25 5235 MFin 5235. Since 1st April 2013, the seller is obliged to issue a paper on demand of a foreign natural person (who is the purchaser and exporter of the goods) to give him/her an evidence for the sale. The paper will be issued in two identical counterparts. On the first counterpart there will be the sign “VAT REFUND”, and on the second counterpart the sign “COPY” (see § 84 subsection 3 of the amendment to the Act on VAT). Except for these two signs: “VAT REFUND” and “COPY”, both counterparts will be identical and equal, and they will be regarded as a proof for the sale of goods.
The Act on VAT does not specify the form or layout of the paper. Thus, the evidence for the sale, which is going to be the background for the VAT refund, can be any kind of paper issued by the seller that proves that the goods were sold and includes all formalities required by the above mentioned law.
The paper does not necessarily have to be a bill, a simplified tax document or another kind of tax document according to the part 5 (§ 26 – 35a) of the Act on VAT, it just has to fulfil the criteria described above.
According to § 84 subsection 3 c) of the amended Act on VAT, it still remains obligatory for the paper to thoroughly describe the subject to taxation (the goods). According to § 84 subsection 6 of the amended Act on VAT, the goods have to be described concretely enough (on the first counterpart of the paper) to make it possible for the customs office to confirm their export outside the EU territory. It is also possible to define just the type of the goods (e.g. clothing) and to attach a document specifying the goods more in detail (invoice, bill or other). In such case, this kind of document has to be attached to the first counterpart of the paper (the one with the sign “VAT REFUND”). For the other counterpart (the one with the sign “COPY”), it is sufficient to include just the type of the goods.
There is a novelty included in § 84 subsection 3 i) of the amended Act on VAT – it is now obligatory to put following data into the paper: name, surname and the place of residence of the foreign natural person who is exporting the goods. In the previous form No 25 5235 MFin 5235 which was submitted to the customs office by the foreign natural person (purchaser/exporter), this person (purchaser/exporter) was specified by name, surname, the place of permanent residence, country and passport number. It will now be obligatory for the seller to fill in the purchaser´s data into the paper. We know about possible problems the seller can encounter while searching for the data regarding the precise place of residence of the exporting foreign natural person (purchaser/exporter) according to § 4 subsection 1 i) of the Act on VAT, especially when the data are not available in the Roman alphabet. Therefore, it is in this case sufficient to name just the country where the exporting foreign natural person has his/her place of residence.
It is always important to meet the objectives of the law which is to ensure that VAT included in the price of the goods that were purchased in the Czech Republic can only be refunded to a person who is a non EU resident and whose place of residence in a third country is registered in his/her passport or another ID document acknowledge by the Czech Republic.
According to § 84 subsection 6 of the amended Act on VAT, the export of goods outside the EU is confirmed by the customs office through confirmation of the date of the export, and of the fulfilment of the following conditions: the exported goods are non commercial goods, the minimal limit for goods to be bought from one seller within one day was reached, and the goods are exported within a travel relation (the goods are not transported by post or any forwarding agent but the exporting person has the goods in his/her luggage).
Czech customs officers are authorised to check the ID documents of the controlled persons – for example their passport or other travel documents. The first counterpart of the paper includes data regarding the foreign natural person (purchaser/exporter) as well as the description of the goods, and is therefore perceived by the customs officers as an evidence for the fact that the exporter is identical with the person named in the paper, and also that the exported goods are identical with the goods described in the paper or in its attachments.
Please note that the change of the system of export VAT refund to natural persons from the third countries is not directly affected by the temporary provisions of the Article II of the Act No 502/2012 Sb., which means that VAT refund related to the tax period until 31st March 2013 still remains subject to the Act on VAT in the wording which was valid until the given date (31st March 2013). In other words, this means that VAT refund (to a foreign natural person) regarding goods purchased before 31st March 2013 and exported after 1st April 2013 will follow the original wording of § 84 of the Act on VAT which was valid until 31st March 2013.
If the goods were purchased before 31st March 2013, the procedure of VAT refunding will be carried out according to § 84 subsection 3 of the current wording of the Act on VAT, and the seller will issue a paper without the signs “VAT REFUND” and “COPY” and without the name, surname and the place of residence of the foreign natural person (purchaser/exporter), and the foreign natural person will submit the form No 25 5235 MFin 5235 to be confirmed by the customs office; in case of export, this must be done 3 months after the end of the month in which the goods were purchased, at the latest.
The VAT refund procedure described above applies for foreign natural persons. If a foreign natural person exports the purchased goods 3 months after the end of the month in which the goods were purchased, at the latest, the export documents can be submitted to the customs office for confirmation according to the above mentioned § 84 subsection 6 of the amended Act on VAT till 30th June 2013 (the form No 25 5235 MFin 5235 as well as the first counterpart of the paper with the sign “VAT REFUND”) – depending on whether the goods were purchased before or after 1st April 2013.
