Deadline for VAT refund only extended from next year?
On 21 April 2020 the government approved a bill on the administration of tax deductions, which should ensure that excess deductions of VAT shall be refunded to VAT payers within the currently valid 30-day deadline. The bill intends to suspend the extension of the deadline for refunding the VAT deductions to 45 days, which was to be introduced by the amendment to the Tax Procedure Code presently being debated in parliament.
An amendment to the Tax Procedure Code is currently awaiting approval by the Chamber of Deputies after having been returned to it by the Senate. The amendment, among other things, extends the deadline for refunding VAT: currently, excess deductions are generally refunded within 30 days from the deadline for filing VAT returns; the amendment extends this to 45 days from the deadline for filing the VAT return, while also introducing an advance for excess VAT deductions, to refund the ‘undisputed’ portion of the excess deduction.
Considering the present circumstances, the government has proposed preserving the current 30-day deadline for refunding excess VAT deductions and suspending the introduction of the advance for excess tax deductions. Since the amendment to the Tax Procedure Code is already in a very advanced stage of the legislative process, the decision was made to do this by a separate law with the same effective date as the effective date of the amendment to the Tax Procedure Code, i.e. the first day of the second calendar month following the date of the amendment’s promulgation in the Collection of Laws.
The regulation under the Act on the Administration of Tax Deductions, which preserves the 30-day deadline for refunding excess VAT deductions, should apply on a temporary basis until the end of 2020. From 1 January 2021 the regulation under the amended Tax Procedure Code shall apply. The bill is yet to be debated by the parliament.