REFUND OF VALUE ADDED TAX TO TAXABLE PERSONS NOT ESTABLISHED IN MALTA BUT ESTABLISHED IN ANOTHER MEMBER STATE

IN ANOTHER MEMBER STATE

SUBSIDIARY LEGISLATION 406.10

REFUND OF VALUE ADDED TAX TO TAXABLE

PERSONS NOT ESTABLISHED IN MALTA BUT

ESTABLISHED IN ANOTHER MEMBER STATE

REGULATIONS

1st January, 2009

LEGAL NOTICE 357 of 2009, as amended by Legal Notices 36 of 2011

and 93 of 2012.

(1) The title of these regulations is the Refund of Value

Add ed Tax to tax abl e p erso ns n ot estab li sh ed in Mal ta but

established in another Member State Regulations.

(2) These regulations shall apply to refund applications

submitted after 31st December 2009.

(3) These regulations shall bring into force the provisions of

Council Directive 2008/9/EC of 12th February 2008.

For the purposes of these regulations, and unless the

context otherwise requires -

"the Act" means the Value Added Tax Act;

"applicant" means the taxable person not established in Malta

making the refund application;

"refund application" means the application for refund of VAT

charged in Malta to the taxable person not established in Malta in

respect of goods or services supplied to him by other taxable

persons in Malta or in respect of the importation of goods into

Malta;

"refund period" means the period mentioned in regulation 16

covered by the refund application;

"taxable person not established in Malta" means a taxable person

within the meaning of article 5 of the Act who is not established in

Malta but established in the territory of another Member State.

These regulations shall apply to any taxable person not

established in Malta who meets the following conditions

(a) during the refund period, he has not had in Malta, the

seat of his economic activity, or a fixed establishment

from which business transactions were effected, or, if

no such seat or fixed establishment existed, his

domicile or normal place of residence;

(b) during the refund period, he has not supplied any

goods or services deemed to have been supplied in

Malta, with the exception of the following

transactions

(i)

the supply of transport services and services

IN ANOTHER MEMBER STATE

ancillary thereto, exempted pursuant to items

4(2), 4(3), 4(4), 4(5), 4(6), 5, 6 and 7 of Part

One of the Fifth Schedule to the Act and article

70 of the Act;

(ii) the supply of goods and services to a person who

is liable for payment of VAT in accordance with

article 20 (2) of the Act.

These regulations shall not apply to

(a) amounts of VAT which, according to the Act, have

been incorrectly invoiced;

(b) amounts of VAT which have been invoiced in respect

of supplies of goods the supply of which is, or may be,

exempt under items 1(2) and 3 of Part One of the Fifth

Schedule to the Act.

(1) The Commissioner shall refund to any taxable person

not established in Malta any value added tax charged in respect of

goods or services supplied to him by other taxable persons in Malta

or in respect of the importation of goods into Malta, insofar as such

goods and services are used for the purposes of the following

transactions

(a) transactions referred to in Article 169(a) and (b) of

Directive 2006/112/EC;

(b) transactions to a person who is liable for payment of

VAT in accordance with article 20(2) of the Act.

(2) Without prejudice to regulation 6, for the purposes of these

regulations, entitlement to an input tax refund shall be determined

pursuant to the conditions laid down in the Tenth Schedule to the

Act.

(1) To be eligible for a refund, a taxable person not

established in Malta has to carry out transactions giving rise to a

right of deduction in the Member State of establishment.

(2) When a taxable person not established in Malta carries out

in the Member State in which he is established both transactions

giving rise to a right of deduction and transactions not giving rise

to a right of deduction in that Member State, only such proportion

of the VAT which is refundable in accordance with regulation 5

may be refunded by the Commissioner as is attributable to the

former transactions in accordance with Article 173 of Directive

2006/112/EC as applied by the Member State of establishment.

To obtain a refund of VAT, the taxable person not

established in Malta shall address an electronic refund application

to the Commissioner and submit it to the Member State in which he

is established via the electronic portal set up by that Member State.

(1) The refund application shall contain the following

information

(a) the applicant’s name and full address;

IN ANOTHER MEMBER STATE

(b) an address for contact by electronic means;

(c) a description of the applicant’s business activity for

which the goods and services are acquired;

(d) the refund period covered by the application;

(e) a declaration by the applicant that he has supplied no

goods and services deemed to have been supplied in

Malta during the refund period, with the exception of

transactions referred to in regulation 3(b)(i) and (ii);

(f)

the applicant’s VAT identification number or tax

reference number;

(g) bank account details including IBAN and BIC codes.

(2) In addition to the information specified in sub-regulation

(1), the refund application shall set out, for each invoice or

importation document, the following details

(a) name and full address of the supplier;

(b) except in the case of importation, the VAT

identification number of the supplier, as allocated by

the Commissioner in accordance with the provisions of

article 10 of the Act;

(c) date and number of the invoice or importation

document;

(d) taxable amount and amount of VAT expressed in the

currency euro;

(e) the amount of deductible VAT calculated in

accordance with regulation 5 and the second paragraph

of regulation 6 expressed in euro;

(f)

where applicable, the deductible proportion calculated

in accordance with regulation 6, expressed as a

percentage;

(g) nature of the goods and services acquired, described

according to the codes in regulation 9.

(1) In the refund application, the nature of the goods and

services acquired shall be described by the following codes

for fuel;

for hiring of means of transport;

for expenditure relating to means of transport (other

than the goods and services referred to under codes 1

and 2);

for road tolls and road user charge;

for travel expenses, such as taxi fares, public transport

fares;

for accommodation;

for food, drink and restaurant services;

for admissions to fairs and exhibitions;

IN ANOTHER MEMBER STATE

for expenditure

on

luxuries,

amusements

and

entertainment;

for other.

(2) If code 10 is used, the nature of the goods and services

supplied shall be indicated.

(3) The Commissioner may require the applicant to provide

additional electronic coded information as regards each code set

out in sub-regulation (1) to the extent that such information is

necessary because of any restrictions on the right of deduction as

applicable under the Tenth Schedule to the Act.

Without prejudice to requests for information under

regulation 20, the Commissioner may require the applicant to

submit by electronic means a copy of the invoice or importation

document with the refund application where the taxable amount on

an invoice or importation document is one thousand euro (€1,000)

or more. Where the invoice concerns fuel, the threshold is two

hundred and fifty euro (€250).

The Commissioner may require the applicant to provide a

description of his business activity by using the harmonised codes

determined in accordance with the second sub-paragraph of Article

34a(3) of Council Regulation (EC) No 1798/2003.

The Commissioner may specify which language or

languages shall be used by the applicant for the provision of

information in the refund application or of possible additional

information.

(1) If subsequent to the submission of the refund

application the deductible proportion is adjusted pursuant to

Article 175 of Directive 2006/112/EC, the applicant shall make a

correction to the amount applied for or already refunded.

(2) The correction shall be made in a refund application during

the calendar year following the refund period in question or, if the

applicant makes no refund applications during that calendar year,

by submitting a separate declaration via the electronic portal

established by the Member State of establishment.

(1) The refund application shall relate to the following

(a) the purchase of goods or services which was invoiced

during the refund period, provided that the VAT

became chargeable before or at the time of the

invoicing, or in respect of which the VAT became

chargeable during the refund period, provided that the

purchase was invoiced before the tax became

chargeable;

(b) the importation of goods during the refund period.

(2) In addition to the transactions referred to in sub-regulation

(1), the refund application may relate to invoices or import

documents not covered by previous refund applications and

concerning transactions completed during the calendar year in

IN ANOTHER MEMBER STATE

question.

(1) The refund application shall be submitted to the

Member State of establishment at the latest on 30 September of the

calendar year following the refund period. The application shall be

considered submitted only if the applicant has filled in all the

information required under regulations 8, 9 and 11

Provided that refund applications which relate to refund

peri ods in 2 009 shal l be subm it ted to t he M ember Stat e of

establishment by not later than the 31st March, 2011.

(2) The Member State of establishment shall send the applicant

an electronic confirmation of receipt without delay.

The refund period shall not be more than one calendar year

or less than three calendar months. Refund applications may,

however, relate to a period of less than three months where the

period represents the remainder of a calendar year.

(1) If the refund application relates to a refund period of

less than one calendar year but not less than three months, the

amount of VAT for which a refund is applied for may not be less

than fpur hundred euro (€400).

(2) If the refund application relates to a refund period of a

calendar year or the remainder of a calendar year, the amount of

VAT may not be less than fifty euro (€50).

(1) The Member State of establishment shall not forward

the application to the Commissioner where, during the refund

period, any of the following circumstances apply to the applicant in

that Member State of establishment

(a) he is not a taxable person for VAT purposes;

(b) he carries out only supplies of goods or of services

which are exempt without deductibility of the VAT

paid at the preceding stage pursuant to Articles 132,

135, 136, 371, Articles 374 to 377, Article 378(2)(a),

Article 379(2) or Articles 380 to 390 of Directive

2006/112/EC or provisions providing for identical

exemptions;

(c) he is covered by the exemption for small enterprises

provided for in Articles 284, 285, 286 and 287 of

Directive 2006/112/EC;

(d) he is covered by the common flat-rate scheme for

farmers provided for in Articles 296 to 305 of

Directive 2006/112/EC.

(2) The Member State of establishment shall notify the

applicant by electronic means of the decision it has taken pursuant

to sub-regulation (1).

(1) The Commissioner shall notify the applicant without

delay, by electronic means, of the date on which the application is

received.

IN ANOTHER MEMBER STATE

(2) The Commissioner shall notify the applicant of the decision

to approve or refuse the refund application within four months from

the date of its receipt.

(1) Where the Commissioner considers that he does not

have all the relevant information on which to make a decision in

respect of the whole or part of the refund application, he may

request, by electronic means, additional information, in particular

from the applicant or from the competent authorities of the Member

State of establishment, within the four-month period referred to in

regulation 19(2). Where the additional information is requested

from someone other than the applicant or a competent authority of

a Member State, the request shall be made by electronic means only

if such means are available to the recipient of the request.

(2) If necessary, the Commissioner may request further

additional information. The information requested in accordance

with this regulation may include the submission of the original or a

copy of the relevant invoice or import document where the

Commissioner has reasonable doubts regarding the validity or

accuracy of a part icular claim . In t hat case, the t hresholds

mentioned in regulation 10 shall not apply.

(3) The Commissioner shall be provided with the information

requested under sub-regulation (1) within one month of the date on

which the request reaches the person to whom it is addressed.

Where the Commissioner requests additional information,

he shall notify the applicant of his decision to approve or refuse the

refund application within two months of receiving the requested

information or, if he has not received a reply to his request, within

two months of expiry of the time limit laid down in regulation

20(2). However, the period available for the decision in respect of

the whole or part of the refund application shall always be at least

six months from the date of receipt of the application by the

Commissioner

Provided that, where the Commissioner requests further

additional information, he shall notify the applicant of his decision

in respect of the whole or part of the refund application within

eight months of receipt of the application.

(1) Where the refund application is approved, refunds of

the approved amount shall be paid by the Commissioner at the

latest within ten working days of the expiry of the deadline referred

to in regulation 19(2) or, where additional or further additional

information has been requested, the deadlines referred to in

regulation 21.

(2) The refund shall be paid in Malta or, at the applicant’s

request, in any other Member State. In the latter case, any bank

charges for the transfer shall be deducted by the Commissioner

from the amount to be paid to the applicant.

IN ANOTHER MEMBER STATE

(1) Where the refund application is refused in whole or in

part, the Commissioner shall notify the applicant with the decision

including the grounds for refusal.

(2) Appeals against decisions to refuse a refund application

may be made by the applicant to the Administrative Review

Tribunal in terms of article 44 and the Ninth Schedule to the Act.

(3) Where the Commissioner fails to take a decision on a

refund application within the time limits mentioned in regulations

19(2) and 21, it shall mean that the application is deemed to have

been rejected.

(1) Where a refund has been obtained in a fraudulent way

or otherwise incorrectly, the Commissioner shall proceed directly

to recover the amounts wrongly paid and any penalties and interest

imposed in accordance with sub-regulation (2), without prejudice

to the provisions on mutual assistance for the recovery of VAT.

(2) Where a refund has been obtained in the circumstances

mentioned in sub-regulation (1), an adm inist rative penalty

equivalent to twenty per cent of the amount unduly received shall

become due, together with interest at the rate of zero point seven

five per cent (0.75%) per month or part thereof which interest shall

start to run from the date of payment of the amount unduly received

to the date when such amount together with the administrative

penalty and interest is paid back to the Commissioner

Provided that, the amount of such administrative penalty

and interest taken together shall not exceed the amount obtained in

a fraudulent or any other irregular manner.

(3) Where an administrative penalty or interest has been

imposed but has not been paid, the Commissioner may suspend any

further refund to the taxable person concerned up to the unpaid

amount.

The Commissioner shall take into account as a decrease or

increase of the amount of the refund any correction made

concerning a previous refund application in accordance with

regulation 13 or, where a separate declaration is submitted, in the

form of separate payment or recovery.

(1) Interest shall be due to the applicant by the

Commissioner on the amount of the refund to be paid if the refund

is paid after the last date of payment pursuant to regulation 22(1).

(2) If the applicant does not submit the requested additional or

further additional information to the Commissioner within the

specified time limit, sub-regulation (1) shall not apply. It shall also

not apply until the documents to be submitted electronically

pursuant to regulation 10 have been received by the Commissioner.

(1) Interest shall be calculated from the day following the

last day for payment of the refund pursuant to regulation 22(1) until

the day the refund is actually paid.

(2)

Interest shall apply in accordance with article 24(3) of the

IN ANOTHER MEMBER STATE

Act.

(1) The provisions of the Refund of Value Added Tax to

taxable persons not established in Malta Regulations, 2004 * shall

continue to apply to refund applications submitted before 1st

January 2010.

(2) References to the revoked regulations shall be construed as

references to these regulations except for refund applications

submitted before 1st January 2010.

*Revoked by these Regulations.