Businesses can be required to register for VAT in EU member states, other than the one in which they are based, if they supply goods via mail order to those states, over a certain threshold. Businesses that are established in one member state but which receive supplies in another member state may be able to reclaim VAT charged in the second state. To do so, businesses have a value added tax identification number. A similar directive, the Eight VAT Directive, also allows businesses established outside the EU to recover VAT in certain circumstances.
To encourage international trade, legislation was adopted by the European Union (8th Directive in 1979) which provides an opportunity for foreign entities to reclaim VAT on certain European business expense.
The US companies with a branch or establishment in an EU state may claim VAT incurred in other EU states under the (slightly more flexible) internal refund scheme, the 8th Directive.
The Directive allows businesses to reclaim VAT incurred by submitting a claim, together with the original supporting invoices. Claims have to be made to a designated office in each member state, using a common EU form.
EIGHTH COUNCIL DIRECTIVE of 6 December 1979 on the harmonization of the laws of the Member States relating to turnover taxes - Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (79/1072/EEC).
For all 8th Directive claims, the claim period in all states is a calendar year, with a deadline of 30 June of the following year. So, claims for 2007 are due by 30 June 2008.