Refund of VAT from the state budget
Refund
of VAT from the state budget
Today we will review on one of the important topics -
When
the company in
Georgia purchases goods and
then exports those
goods, VAT On purchase is already paid and then those products are for
export sale with 0% VAT. In
such a case, the company has the right to request a refund of the VAT which was paid
at the moment of purchase.
Exporter company can be a Georgian resident company, also
non-resident company, which is registered as
a VAT tax
payer in
Georgia.
If a non-resident has a branch
in Georgia, a permanent establishment, or is obligated to pay VAT and is
registered as a VAT payer, it can also
become an exporter.
In such a case, it also
benefits from the 0% rate and can claim VAT paid on purchases from the budget.
Also, a non-resident company
that is not registered as a VAT payer in Georgia and is a member of the
European Union can reclaim the VAT paid in Georgia.
Article 1811 of the
Tax Code of Georgia. VAT refund to a taxable
person in a European Union member state as follows:
1.
A taxable person of an EU Member State has the right to reclaim the VAT paid
upon the purchase of goods (except immovable property)/services in Georgia or
upon the import of goods, if the said person meets all of the following
conditions:
a)
The person does
not have a fixed establishment in Georgia or his place of business and/or
permanent residence is not in Georgia;
b)
Goods/services
purchased by a person in Georgia or imported goods are used in VAT taxable
transactions;
c)
In the event of a similar transaction, a person registered as a VAT payer in
Georgia, in accordance with this Code, would be entitled to deduct the VAT paid.
2.
A taxable person of a Member State of the European Union shall be obliged to
appoint an authorized representative for the purpose of VAT refund, who shall
be responsible for the obligations provided for in this Code for the taxpayer
within the scope of the VAT refund provided for in this Article.
3.
The rules and conditions for VAT refunds provided for in Parts 1 and 2 of this
Article, as well as the criteria that an authorized representative must meet,
shall be determined by the Minister of Finance of Georgia.
According to Order No. 996 of
the Minister of Finance of Georgia, in order to refund VAT, it is necessary to
appoint an authorized representative:
1.
For the
purpose of VAT refund, the taxable person is obliged to appoint an authorized representative
who, within the scope of VAT refund provided for in this Chapter, shall be
responsible for the obligations of the taxpayer specified in this Chapter and
the Tax Code of Georgia.
2.
An
authorized representative represents the interests of a taxable person and acts
on the basis of a power of attorney issued by him and certified by a notary,
within the limits of the authority specified in such power of attorney, this rule and the legislation of Georgia.
3.
The
authorized representative must be a resident of Georgia and registered as a VAT
payer in accordance with the rules established by Georgian legislation.
4.
The
authorized representative appointed by the taxable person is jointly and
severally liable with the taxable person for the reimbursement of VAT refunded
based on incorrect information.
5.
Any
subsequent application for a VAT refund will not be granted if the taxable
person or authorized representative has an outstanding recognized tax debt.
In order to request a VAT
refund, a taxable person must submit an application to the Revenue Service
through an authorized representative in the form of Appendix No. III-28. The
application must be drawn up in Georgian and the requested amount must be
indicated in GEL.
When submitting an application
for a VAT refund, the reporting period specified in the application must not
exceed 1 calendar year and cannot be less than three months of a calendar year.
However, a refund request may be submitted for a reporting period of less than
three months if it includes less than three months of the reporting period
remaining before the end of the calendar year (for example, from November 1 to
December 31 inclusive).
The application may be
submitted to the tax authority in the month following the end of the
three-month reporting period or calendar year, but no later than six months
from the end of the calendar year in which the VAT taxable transaction was
carried out in accordance with the procedure established by the Tax Code of
Georgia.
It is also important to
consider in which cases VAT paid from the budget is refunded:
- On a business trip Related Expenses → VAT Refundable.
- Goods/services purchased in Georgia for
permanent use→ VAT Not Refundable.