VAT refund is a topic that interests almost every entrepreneur. No wonder - an excess of input VAT over output VAT is real money that can support the company’s bank account, improve cash flow or help finance current expenses.
In practice, however, a VAT refund does not always take place within the same timeframe. The waiting time depends on the taxpayer’s situation, the type of refund requested and whether the company meets the conditions set out in the VAT Act.
Check when you can expect a VAT refund and what to do to avoid unnecessarily extending the waiting time for your money.
The standard VAT refund deadline is 40 days
As a rule, the tax office should refund the VAT surplus within 40 days from the date of submitting the settlement.
The refund is paid to the taxpayer’s bank account or to a credit union account indicated in the identification filing. Therefore, it is worth making sure that the company bank account has been properly reported and appears in the relevant registers.
Important:
40 days is the standard deadline, but it is not always the final one.
If the tax office considers that the validity of the refund requires additional verification, it may extend the payment deadline. In such a situation, it may ask, among other things, for:
- invoices,
- payment confirmations,
- VAT registers,
- additional explanations,
- documents confirming the right to deduct the tax.
The good news is that if, after the verification is completed, the refund proves to be justified, the tax office should pay the amount due together with the appropriate interest.
VAT refund within 25 days - faster, but subject to conditions
For many entrepreneurs, the most attractive option is a VAT refund within 25 days. This solution allows funds to be recovered faster, but requires specific conditions to be met.
The most important condition concerns payment for purchase invoices.
If the taxpayer wants to receive a refund to a standard company bank account within 25 days, they should make sure that cost invoices have been paid through the reported bank account.
Importantly, amounts paid in another way, for example in cash, by set-off or resulting from invoices that do not meet the requirements, must not exceed the statutory limit.
The taxpayer’s history is also important. The company should be registered as an active VAT taxpayer for the required period and submit declarations on time. Therefore, a 25-day refund to a company bank account will not always be available to new entrepreneurs.
In practice, with this type of refund the tax office often analyses the settlement more carefully. It may check, among other things:
- whether the invoices have been paid,
- whether the payment was made from the correct account,
- whether the bank account has been reported,
- whether the amount carried forward from previous periods does not exceed the limit,
- whether the JPK file contains no formal errors.
The most common reasons for refusing a faster VAT refund
Many entrepreneurs assume that once they have shown a VAT surplus, the money will quickly return to their account. Unfortunately, with an accelerated refund, details matter.
The most common problems are:
- lack of payment for purchase invoices,
- cash payments or set-offs exceeding the permitted limits,
- too high an amount of VAT carried forward from previous periods,
- too short a period of registration as an active VAT taxpayer,
- errors in the JPK file,
- lack of consistency between the data in the VAT registers and the source documents.
Important:
Failure to meet the conditions for a refund within 25 days does not necessarily mean losing the right to a VAT refund. Most often, it simply means that the tax office will refund the money within the standard deadline, not the accelerated one.
Refund to the VAT account - a simpler alternative
Entrepreneurs often forget that there is one more possibility for a faster refund - a refund to the VAT account.
In this case, the deadline is also 25 days, but the procedure is less strict than with the classic refund to a standard company bank account. The taxpayer submits the relevant request in the settlement, and the tax office transfers the funds to a special VAT account.
The downside is that the money accumulated in the VAT account cannot be used as freely as funds in a standard bank account.
Funds from the VAT account can be used primarily for:
- paying VAT to contractors under the split payment mechanism,
- settling selected public-law liabilities,
- paying certain tax and contribution liabilities.
Nevertheless, for many companies a refund to the VAT account may be a good solution, especially when the entrepreneur regularly pays purchase invoices and tax liabilities.
Express VAT refund within 15 days
The shortest VAT refund deadline provided for is 15 days.
This solution is aimed mainly at taxpayers who record sales using cash registers and largely accept cashless payments.
To use this deadline, several conditions must be met jointly. The following are important, among other things:
- an appropriate share of sales recorded on cash registers,
- a high share of cashless payments,
- a specified value of sales from previous months,
- correct and timely sales records.
In practice, this is therefore a solution for a specific group of entrepreneurs, primarily those who conduct retail sales, use online cash registers and accept payments by card, bank transfer or mobile payments.
What if the company had no sales?
The situation is different when the company incurred costs in a given period but did not carry out taxable activities.
This may apply, for example, to:
- companies at the investment stage,
- entrepreneurs preparing to start business activity,
- companies in a temporary sales downtime,
- entities incurring significant expenses before starting sales.
In such a case, the standard VAT refund deadline may be as long as 180 days from the date of submitting the settlement.
However, the legislator provides for the possibility of shortening this deadline to 60 days if the taxpayer submits an appropriate request and a property security.
This solution may be important especially when the company has incurred significant investment expenses and wants to recover the tax more quickly.
Can the tax office extend the VAT refund deadline?
Yes. The tax office may extend the refund deadline if it decides that additional verification of the settlement is necessary.
This does not automatically mean that the taxpayer has done something wrong. Sometimes the tax office simply wants to verify:
- invoices,
- payments,
- contractors,
- the method of settlement,
- the consistency of JPK with the documents,
- the validity of the VAT deduction.
Such actions occur more often in the case of large refund amounts or requests for accelerated refunds.
Important:
An extension of the refund deadline should be justified. The taxpayer should know what the tax office’s doubts are based on and what documents are needed to clarify them.
How to prepare for a VAT refund?
Before submitting the settlement, it is worth checking a few basic issues.
1. Correctness of the JPK file
The declaration and JPK should be formally and substantively correct. Even minor errors may result in questions from the tax office.
2. Correct recognition of invoices
Cost invoices should be correctly included in the VAT registers. It is worth checking the dates, amounts, invoice numbers, contractor’s tax identification number and the correct period for deduction.
3. Payment for invoices
For an accelerated refund, it is necessary to verify whether the invoices have been paid in the required manner.
4. Current bank account
The bank account should be reported and up to date. If the refund is to be paid to the company bank account, the account details must be correct.
5. Payment confirmations and documentation
A good practice is to collect payment confirmations and documents confirming the validity of the VAT deduction. Thanks to this, if the tax office asks for explanations, the entrepreneur can respond faster and reduce the risk of delaying the refund.
Summary
A VAT refund may be made within different deadlines: 15, 25, 40, 60 or 180 days. It all depends on the company’s situation, the type of sales carried out, the method of paying invoices and the correctness of the settlement.
The most important thing is not to treat a VAT refund as a mere formality. Preparing documents, making a correct settlement and choosing the right refund procedure can have a real impact on when the money reaches the company bank account.
If your company shows a VAT surplus and you want to check whether you can use a faster refund, it is worth consulting the settlement with an accounting office. A proper analysis of documents helps avoid errors, reduce the risk of questions from the tax office and recover funds faster.
Do you need help with a VAT refund?
Do you have doubts about which VAT refund deadline applies to your company?
Contact our accounting office. We will analyse your situation, check the documents and help prepare the settlement so that the money returns to your account as quickly as possible.