The VAT Law has been amended to provide for the payment of interest on VAT refunds in accordance with the provisions of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax.
As a result of the amendment a taxable person who submits a claim for a refund of VAT which is not paid within four months of submission of the claim will be entitled to interest at the statutory rate (currently 5% per year) from the date the four-month period expires, as long as the delay in repayment is not due to any fault, action or omission on the part of the taxable person. In the event that a VAT audit is undertaken in relation to the refund application, the four-month deadline for repayment and accrual of interest is increased to eight months.
The amendment takes effect from 19 February 2013 and relates to tax periods commencing after that date, the first of which will be 1 March- 31 May 2013, in respect of which the due date for submission of returns is 10 July 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.