Update regarding recent amendments to Regulations based on Articles 30, 42B and 42F of the VAT Legislation

A. New Regulations based on Article 30

The New amending regulations of 2024 based on Article 30, were issued by the Council of Ministers, and after being submitted and approved by the House of Representatives were published in the Official Gazette of the Republic on 8 March 2024.

The regulations, based on Article 30, were issued for the purpose of harmonization with Council Directive (EU) 2008/9 of 12 February 2008 laying down detailed rules regarding the refund of VAT to taxable persons (t.p) not established in the MS the claim is made and having their establishment in another MS.

The amending regulations of 2024 will be read together with the basic regulations (K.D.P. 95/10) and will be referred to as ‘Tax Refunds to Persons Established in Member States of the European Union Regulations of 2010 until 2024.

Regulation 2 of the amending regulation of 2024 amends paragraph 1 of Regulation 15 of (K) K.D.P. 95/10 by replacing the phrase.

“to the Minister of Finance pursuant to Article 52 of the Law” with the phrase

“to the Commissioner pursuant to Article 52A of the Law”

Analysis of the above amendment

What does Regulation 15 of the K.D.P. 895/10 refer to?

Regulation 15 gives the right to the trader who is established in another MS, who had submitted a VAT refund claim, if the Commissioner rejects his claim, either partially or totally, to submit an objection to the Minister of Finance* based on Article 52 of Law.

*The reference to the ‘Minister of Finance’ in Article 52 was abolished on 7/7/17 and replaced with the reference to the Administrative Court and Tax Board (Eforiako Symvoulio), since the reference to the Minister of Finance is not consistent with Regulation 15.

With the replacement of the Minister of Finance with the Tax Commissioner under Article 52A, the objection can be made to the Commissioner instead to the Minister of Finance.

Comment: Although Article 52A does not include the above case, the Tax Department will either have to amend Article 52A to include this particular case or, in the context of good administration, will accept objections based on the Amending Regulation of 2024.

B. Amendment of regulation 119 of Basic regulations (Based on Article 42B)

What does Paragraph 1 of Regulation 119 refer to

Paragraph 1 of Regulation 119 refers to traders who are established in non-EU countries and territories (Third Countries) and request a refund of VAT paid in the Republic. The VAT refund claim by the trader in question is not satisfied unless the Third Country in which the trader is established provides for reciprocal arrangements to refund taxes to taxable persons established in the Republic.

What does the amendment of Paragraph 1 of Regulation 119 is all about?

With the amendment of Regulation 119, a reservation is added at the end of paragraph 1 on the basis of which paragraph 1 does not apply if the non-EU trader is registered in the special regime for distance sales of goods from third countries or territories in accordance with the provisions of the VAT Regulations*, when they are established in a third country with which the EU has concluded a mutual assistance agreement.

*The Regulations are referred to as: “Special Regime for (a) Intra-Community Distance Sales of Goods, (b) for Supplies of Goods within the Republic Made Through Electronic Interfaces Facilitating These Supplies and (c) for Services Provided by Taxable Persons Established within the Republic but not Established in the Member State of Consumption”.

Simply put, traders established in non-EU countries or territories with which the EU has concluded a mutual assistance agreement can claim a VAT refund if they are registered under a special regime (OSS) for distance sales of goods or services.

The new reservation applies retroactively from 1 July, 2021

C. New Regulations based on Article 42ΣΤ

The new regulations of 2024 are referred to as the VAT regulations:

“Special Regime for (a) Intra-Community Distance Sales of goods, (b) for Supplies of Goods Made Through Electronic Interfaces that Facilitate these Supplies and (c) for Services provided by established within the Republic but not established in the MS of Consumption’ (hereinafter ‘Special Regime’”

and amend the basic Regulations of 2021 which have the same title as above and will be referred to together as Regulations of 2021 and 2024.

The amendment concerns the addition of Regulation 3A immediately after Regulation 3 which provides that if the taxable person elects to use the Special Regime has no obligation to issue an invoice for transactions subject to the Special Regime.

The addition of Regulation 3A is effective as of 7/1/21

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