Interest on VAT refunds – 30/10/2012
An amendment to the VAT law was published in the Government Gazette of the Republic on the 19th October 2012 and refers to the refund of VAT amounts together with interest. The provisions of this Law will come into effect from 19th February 2012 and will be applicable to claims made in relation to VAT periods following the date of enforcement.
The amendment provides that when a claim for a refund of VAT is made by a taxable person and this refund is overdue for more than four months from the date the claim was made, the person is entitled to a refund of the principle amount and interest, which will be calculated from the end of the four months.
A taxable person is entitled to a VAT refund together with interest if the delay in refunding the principle amount was not the result of the taxable person’s actions/ omissions and the refund has been overdue for more than four months from the date of the claim (extended to eight months in case there is an investigation from the VAT Commissioner).