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Non-functioning EU electronic VAT refund system threatens road transport companies of bankruptcy


05 Nov 2010


Euro & Finance

IRU General Assembly adopts Resolution calling on governments to restore an efficient interoperable EU VAT refund system and to simplify refund rules for non-EU operators.

Geneva - The IRU General Assembly today adopted a Resolution on the dysfunctioning of national VAT refund systems within the EU, warning of a liquidity crisis and company bankruptcies in the road transport sector if problems remain unsolved. This would be another blow to the fragile economic recovery, as these road transport companies connect businesses to their markets and ensure citizens’ mobility. The IRU Resolution presses the EU and governments to act decisively to ensure that operators receive the money they are due before it is too late.

Since 1 January 2010, national electronic web portals have become the norm for refunding all VAT paid by taxable persons in another EU Member State. However, these web portals are unacceptably slow, and a lack of harmonised data requirements cause submission errors, delayed payments and even claims involving large sums of money being lost. Such VAT claims from EU road transport operators that purchase fuel, repair services or motorway tolls abroad represent 80% of the total number submitted each year.

IRU President, Janusz Lacny, said, “Failure to ensure the reliable and timely refund of VAT means bankruptcy for transport companies whose liquidity situation is already on a knife edge due to the economic crisis. These companies depend absolutely on VAT refunds or claims being honoured promptly by the governments who owe this money. VAT must be refunded and IRU expects those Member States, which do not have an operational web portal, capable of timely refunds to pay interest on all late payments in full.”

EU Member States recently agreed to postpone the deadline for the submission of 2009 claims, but refused to grant the European Commission powers to lead efforts to harmonise diverging technical elements of the system. ‘’This is unacceptable,’’ added Mr Lacny, ‘’everything must be done to upgrade and harmonise these web portals. This is not about national prerogatives but individual businesses and whether they can continue to function, support the economy and provide jobs!”

The IRU Resolution advocates extending the deadline for the submission of 2009 VAT claims until a properly functioning VAT refund system is restored, reintroducing the pre-2010 paper-based submission process to clear the backlog of unpaid claims, as well as agreeing over a timetabled plan developed together with the industry for removing technical problems from the system.

The IRU also considers that it is now time for the EU to address the fragmentation of rules for reimbursing VAT to non-EU operators, as the current mosaic of bilateral agreements between individual Member States and third countries has resulted in a distorted and unequal situation between road transport companies operating in the same transport market. The EU should now work towards harmonised arrangements at EU level to be negotiated with third countries, ensuring consistency and equal treatment for all.

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Read the IRU Resolution

Press contact: Juliette Ebélé, +41 22 918 27 07,