You have entered all your documents in Dexxter and the vAT declaration is automatically ready for you! You click through on it and it turns out to state a VAT balance in your favour! A VAT refund? Can happen, faster than you think even!
In other words, if the VAT you have paid on all your purchases (and can recover via your VAT declaration) is greater than the VAT you have passed on to your customers, this is called a VAT refund.
Then you have a choice between two options: you either go and reclaim the VAT from the VAT administration (scenario 1) or you simply let the VAT credit stand (scenario 2). We will go through both scenarios:
Scenario 1: getting a VAT refund refund refunded
Requesting a vAT refund is child’s play with Dexxter. You have created all your sales invoices in Dexxter, entered all your purchase invoices, then you go to Dexxter and can generate your vAT declaration.
Turns out that you meet all the rules for claiming a VAT refund, then we’re going to ask you the question. Do you want a vAT refund? Then you can let Dexxter know with the click of a button, that’s all you have to do!
Then, using the handy Dexxter roadmap, you can start submitting your vAT declaration (with a VAT refund) yourself on Intervat, the online portal of VAT administration.
Still, here are a few tips & tricks you should pay attention to (or in other words, what Dexxter automatically watches out for you).
Note 1! Reclaiming VAT from the VAT administration is not always possible, as your VAT refund must exceed a certain minimum threshold (see below).
Attention 2! You can only reclaim a VAT credit upon submission of a timely vAT declaration.
Threshold amount for a VAT refund
The VAT administration applies a minimum of €400 in quarter 1, 2 & 3 before they actually want to proceed with a VAT refund. This is to keep things a bit easy administratively, that way they don’t have to start paying relatively small amounts back to entrepreneurs.
In quarter 4, that minimum threshold to qualify for a refund lowers to €50.
To arrive at the total amount of the minimum threshold, vAT credits from previous quarters may also be taken into account. In other words, if there were also previous quarters’ VAT balances that were too small to be refunded, they may all be added up to still reach the minimum threshold.
As soon as your VAT balance exceeds €400 in quarter 1, 2 or 3, Dexxter will automatically present you with the question whether you want to apply for a VAT refund. Ditto for quarter 4 of course, but with a threshold of €50.
Dexxter does this for you!
Dexxter is only going to question you if you want a VAT refund if you meet the threshold amount!
How long does it take for a vAT refund to be deposited?
Have you filed your vAT declaration on time, met the minimum threshold and requested the refund through Dexxter? Then the VAT administration will refund the total VAT credit within 3 months.
The total VAT credit! So the addition of all past vAT declarations where there was a VAT credit.
Scenario 2: letting a VAT refund stand
This is always possible! You must effectively request a refund via the vAT declaration. From the moment you are allowed to request a refund, Dexxter will of course always ask you the question whether you would like a refund. Just answer ‘yes’ at that point and the rest will take care of itself! If you do not question a refund, your VAT credit will simply be stated in the VAT administration.
A VAT credit can be seen as a kind of savings account with the VAT authorities (although one that will not earn you any interest). Either you question a refund or you leave the credit in the ‘savings account’, however large or small that vAT credit may be. That savings account will then automatically be used next quarters for a vAT balance to be paid.
So reclaiming VAT is definitely not a must, but otherwise leaving a VAT balance in place seems to have little benefit.
So should I always reclaim a VAT balance?
Why not? Rumour has it that those who question a refund are extra likely to face a VAT audit. Indeed, a central service of the VAT administration selects, based on risk analysis, from the VAT refund list an amount of dossiers that should be checked anyway.
Why do? That inspection is normally rather limited. In principle, the auditor will simply check the cause of your credit, often even subject to an amount of simple questions by e-mail.
For example, if the cause of the VAT refund is a relatively large investment, it is often sufficient to send a copy of the investment invoices should a question follow.
What is the best thing to do then?
- Can you put the money to good use?
- Is the VAT credit so large that offsetting it against future vAT amounts to be paid would take a year or more?
- Is there a balance in your favour every quarter because your income is invoiced at 6% vAT % for a large chunk, for example?
Then feel free to have your VAT credit refunded, but know that the administration might ask you some questions, which is no problem.
However, if you don’t need the money right away, you can choose to carry your credit over to the next quarter.
