VAT: Faster Refunds Coming – Immediate Penalties for Late Filers

Changes in VAT refund procedures for businesses and professionals aim to reduce waiting times and enhance liquidity for beneficiaries, according to ertnews. Simultaneously, a new system for imposing penalties by AADE on those who fail to submit or submit late VAT declarations is being promoted. The upgrade of the automated refund system will ensure that 95% of applications are processed automatically without human intervention, using risk analysis. The goal is to resolve the issue of delayed applications which left over 1,000 VAT refund requests pending for more than 90 days, causing liquidity problems for businesses. In total, in 2024, AADE processed 48,549 applications and lower VAT amounts totaling 3.3 billion euros. Under the current regime, VAT refund applications are checked using risk analysis criteria. Priority is given to applications included in the ‘golden list’ as they meet specific criteria, including having been verified for at least three tax periods with minimal discrepancies between claimed and refunded amounts. Additionally, faster refunds are anticipated for cases involving VAT subject to other member states. By 4.5 months, 40% of examined cases will be settled without additional information, and 95% within 8.5 months. Regarding penalties, by the end of June, the new automatic penalty imposition system for late VAT submissions will be implemented. With the new system, upon submitting a late declaration, penalties will be automatically added by the digital system and electronically communicated to taxpayers immediately after the late submission. Currently, it takes months for authorities to detect violations and issue penalty notices.