VAT refund for bad debts
It is tough going for many entrepreneurs in these times. Due dates approach all too soon and the risk of bad debts is higher than ever. Thankfully the tax office will refund the VAT if it is established that your debtor is not going to pay you (in full). However for this you must be sure to submit a request in time!
Refund VAT on request
The VAT on bad debts will only be refunded if you submit a separate request for it. In the request you must demonstrate that the invoice has not been paid and that it will also not be paid in the future. The latter will often be due to the bankruptcy of your debtor. But you can also demonstrate that the invoice will not be paid with examples of correspondence with the client and/or a debt collection agency.
You must submit the request within a month of the period in which it is established that the invoice will no longer be paid. If you submit the request after this time, then the tax office will still process your request but you lose your rights should the tax office reject your request.
Take note: It is not permitted the include the request for refund in your VAT return.