The following article explains how to handle situations involving VAT refunds to natural persons from third countries upon the export of goods purchased domestically.
VAT refunds to natural persons from third countries outside the EU upon the export of goods are governed by Section 84 of Act No. 235/2004 Coll., on Value Added Tax (hereinafter referred to as the VAT Act). This is a worldwide program used by countries that apply VAT to their goods. It allows natural persons who are not residents of a given country to apply for a VAT refund on goods they purchased there and demonstrably exported across that country's borders.
The selling VAT payer reports the refunded VAT in their tax return at the earliest for the tax period in which the refund took place, and no later than 3 years from the end of the tax period in which the supply was made.
The VAT refund to foreigners described above is reported on line 61 of the "Value Added Tax Return".
Given the above-mentioned supply type "received", we will record the entry either in the received invoice module or under other liabilities.
When recording the tax refund, you only account for the VAT amount that was refunded to natural persons from third countries.
Finally, select line 61 corresponding to the tax refund (Section 84).
An example of how a document processed in this way appears in the VAT Return.
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