"The future" automatic VAT refund for punctual freelancers and businesses

The Independent Authority for Revenue (AADE) has introduced an automatic VAT refund scheme for taxpayers with final VAT arrears.

Entrepreneurs and freelancers will submit their applications electronically, which will be automatically verified as all transactions are digitized, and then the refund amount will be credited to their account. To implement this scheme, a “white list” of enterprises and freelancers is being created that have not given the inspection authorities the slightest hint of tax evasion. The white list will include companies that:

• were audited for at least three tax periods, and the VAT amounts that were ultimately reimbursed to them did not differ by more than 5% from the declared amounts;
• have not committed tax or customs offenses;
• were not suspected of fraud as a result of applying risk analysis criteria.

Those who make it through the whitelist gates can expect their VAT refund to be immediately credited to their bank account once they submit their application online. The automated process will be used for the majority of refund requests, namely 97% of tax refund requests.

The myData electronic platform plays an important role in automated refunds, as the tax authority will be able to know the amount they will receive each month, which will enable automated VAT refunds to be activated.

The new digital system will reduce human intervention and eliminate delays in VAT refunds, a constant requirement of a market hungry for liquidity, especially in recent months as it has been caught in the vortex of the energy crisis, price pressures and the pandemic.

The Automated VAT Refund System is a project included in the recovery plan through which the Independent Revenue Authority will simplify administrative VAT refund procedures for businesses by introducing automated VAT refund procedures, electronic filing and facilitating the risk analysis process for refund claims.

It should be noted that, according to the latest state budget data, tax refund arrears amount to 590 million euros. Based on the delay in payments to beneficiaries, the outstanding tax refund for a period of more than 90 days is €210 million, and the refund for a period of less than 90 days for which a payment order was issued is €380 million.

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