Minimum amounts VAT refund 8th directive: an unexpected pitfall

What are the minimum amounts?

Every EU country applies statutory minimum amounts for VAT refunds under the 8th Directive. Under EU Directive 2008/9/EC, the general thresholds are €400 per quarter and €50 per year. If you do not meet these thresholds, a refund application simply cannot be submitted.

A comprehensive overview of the minimum amounts per country, including countries with their own currency such as Switzerland, the United Kingdom and Norway, can be found in our article on minimum amounts per VAT refund application.

The pitfall: above the threshold, yet full rejection

At first glance, the threshold seems like a simple calculation: submit more than the minimum and you are safe. In practice, that is not always the case.

Suppose you submit a quarterly refund application totalling €450, well above the quarterly threshold of €400. So far, no problem. However, when the foreign tax authority reviews your file, it rejects one or more invoices because they do not meet the requirements for a refund.

After the rejection of those invoices, the remaining valid VAT amount is, for example, €320, well below the quarterly threshold of €400.

The result is that the entire quarterly application is rejected. The rejected invoices must then be included in a supplementary or annual return. If that period is already closed or used, the refund is permanently lost. And even in the supplementary or annual return: if invoices are rejected causing the remaining amount to fall below the annual threshold of €50, the entire return is rejected and the VAT can no longer be reclaimed.

Why are invoices rejected?

Some examples include:

• The type of cost is excluded from refund in that country, such as entertainment expenses or certain fuel types
• The invoice is not in the name of the requesting entity
• The invoice does not meet the local invoice requirements
• The invoice relates to an activity that does not qualify as a business expense

Any of these situations can cause the net refund amount to fall below the threshold after assessment.

What can you do?

The best protection is preventive: ensure your file contains only invoices that genuinely qualify for a refund in the relevant country. This requires knowledge of the local exclusions and invoice requirements per country.

Are you unsure whether an invoice qualifies? Have it assessed in advance before submitting your application. A rejected invoice can put your entire refund at risk.

Let professionals guide you

Delta Refund Solutions reviews your file before submission and filters out invoices that risk being rejected. This prevents a partial rejection from putting your entire refund at risk.

Feel free to contact us, we are happy to help.