How is VAT refunded and to whom is it generally necessary?

How do market participants see VAT refund, that is, subjects of different forms of ownership? Some assess it as the most important source ensuring the filling of the state budget, while others argue that this category is not quite adapted to the realities of domestic business. In other words, the latter insist that there are very serious problems with the payment and return of the tax.

What is the reimbursement of VAT? This is a return of a certain part of the financial resources, which were listed in the form of the same collection, in excess of the necessary. The need for such a return arises in many payers. But unconditional record-breakers in this business are leasing companies, as well as organizations that take part in a variety of export-import operations.

About difficulties

What are the main difficulties in recovering VAT from the budget? Here, first of all, we are talking about tax inspections. Relevant fiscal bodies, accepting declarations with the request to return superfluous, in most cases initiate a check of the activity of the applicant. This act is very logical: what kind of state wants to part with the funds already transferred to the budget? Inspections are initiated to ensure that the enterprise's declaration is legitimate and justified. At the same time it is necessary to check whether it is clean before the law. Accordingly, any organization that has issued a statement of return must prepare (or bring in full order) all of its financial and accounting statements, contracts and so on. Otherwise, any bug that the tax authorities have found is not just a VAT refund, but it will also cause additional penalties from the state. That's really with this, for sure, as they say, it will not rust.

Leasing companies are in the area of special attention from these controlling bodies. Before them very often there is a question of return of the considered type of the tax. The fact is that each of these companies earns their income in the long run, and the value -added tax must be paid immediately. Hence the emergence of the corresponding needs. The FTS very carefully studies the declarations submitted by such organizations, because it reasonably believes that many lessors intentionally understate their income. Accordingly, the receipt by such figures of reparation is not justified.

About exporting

A separate consideration is the VAT refund on exports. And all because the domestic legislation in this area is characterized by a certain blurring of formulations and definitions, which give rise to a lot of questions and complexities. As a result of confrontation between business entities and the state, the decision on whether there will be a VAT refund or not is decided by the arbitration court. As for the procedure for the return of funds, the procedure is standard. First, the organization submits a declaration. After that, a desk audit of its activities is made, following which a decision is made as to whether it is possible or impossible to return. It is noteworthy that this can be either the transfer of excess funds to the company's settlement account, or offset against the payment for future tax periods.