A manufacturing business involved in tooling production approached us asking if we could investigate EU Refund Directive claims they had made over the past few years.
They had previously filed claims in Italy during the years 2005, 2009, 2010, 2011 and 2012, but they had not received the claims themselves, nor any decisions from the Italian authorities. Hence, the business was wondering if anything could be done to grant the refunds because the sizes of them ranged from 20,000 to 150,000 EUR.
Overseas tax authorities
In our experience the Italian authorities are one of the strictest tax authorities in Europe. Usually when they process VAT refund claims, they will query the claim and allow 30 days for a company to respond with supporting documentation/information. They then close the claim and deny a refund if their questions are not answered. This short time frame to respond puts pressure on a business and the recovery of the VAT becomes a much more intensive project.
How we helped
Accordance worked systematically to investigate each individual claim that the client had made to determine the current position and what had happened in the past. Following this project we could confirm that the Italian tax authorities had, at the time of the claim, queried them by writing to the client. However, for various reasons those letters were not responded to and subsequently the tax authority closed the cases for each year. This had led to hundreds of thousands of euros of VAT being unclaimed by the client.
We managed to get all the cases from 2009-2012 re-opened by demonstrating exactly what had happened and how technically the claims were still “alive”. Within 6 months the Italian authorities had fully refunded the 2012 claim worth EUR 50,000 and significant steps had been made to receiving the others as well.
Going forward we are helping the client by analysing all future claims ahead of submission, so there is validation that the claim is correct. We are also managing the submission process which is relieving the client of an administrative burden whilst at the same time giving increased efficiency.