Intra-community VAT refund procedures can often feel like navigating unfamiliar territory without a roadmap. It's complicated, risky, and almost always leaves you spending unnecessary time and resources getting back on course. Fortunately, you don't need to travel solo - especially regarding the newest clarification regarding intra-community supplies of new means of transport.
Luxembourg has recently clarified the VAT refund procedure regarding non-VAT registered persons and new means of transport, clearing the way to successful VAT recovery. Here's what you need to know to ensure you stay on the simpler route.
However, before we go further, it's important to clarify that this refund opportunity only applies to persons (natural or legal persons) not VAT-registered under the regular taxation scheme in Luxembourg. Furthermore, this only applies to the portion of the VAT paid in Luxembourg after selling a new means of transport in another Member State of the European Union.
Let's unpack (with the help of recent clarifications from the Luxembourg Tax Administration).
Who can request a VAT refund?
The eligibility criteria include any person or entity not registered for VAT under the normal taxation scheme. In other words, you do not submit VAT returns regularly and don't often supply intra-community new means of transport. This also only applies to persons (natural or legal) who sell and transfer new means of transportation to a buyer established in another Member State of the European Union.
What constitutes a new means of transport?
The next part of the puzzle clarifies what constitutes a "new means of transport." According to the Guichet.lu, Luxembourg's official administrative information portal, prerequisites regarding 'new means of transport' eligible for partial VAT refund include the following:
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Type
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Exception
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Prerequisites
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Vessels
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- Excludes vessels used for navigation on the high seas.
- Excludes vessels carrying out paid passenger traffic or commercial, industrial or fishing activities.
- Excludes lifeboats
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- A length of more than 7.5 metres
- Delivery takes place within 3 months or less of their first entry into service; or
- They have sailed less than 100 hours.
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Aircraft
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Does not include aircrafts used by airlines that are primarily engaged in international commercial traffic.
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A total take-off weight of more than 1,550 kilograms.
- Delivery takes place within 3 months or less of their first entry into service; or
- They have flown less than 40 hours.
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Motorised land vehicles
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No current exceptions
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- An engine capacity of more than 48 cubic centimetres or a power output of more than 7.2 kilowatts.
- Intended for the transport of persons or goods.
- The delivery takes place within 6 months or less of their first entry into service; or the vehicle has been driven a maximum of 6,000 kilometres.
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What are the refund request deadlines?
As with anything VAT refund-related, you can expect a deadline. For this specific intra-community supply, eligible persons have 15 days from the completion of the taxable transaction to submit a declaration to the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA).
After that, VAT refund requests can be made within five years (from 31 December of the calendar year to which the tax refund relates). If you have yet to request a refund within this time frame, your request will no longer be eligible or considered.
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