Brexit Update – European VAT Recovery & Diesel Excise Duty

As the politicians in London and Brussels continue to make very slow progress about the future shape of Britain’s relationship with the rest of the European Union, many important questions remain unanswered on a number of fronts and how we transition out of the “transition period”.

This article pays particular attention to the potential impact on the EU VAT Recovery process and other diesel excise duties which are currently recoverable by UK transport companies operating on the continent under EU legislation.

 The 8th Directive – The Current Model

Any transport companies registered in a member state is entitled to recover VAT costs using the 8th Directive, this framework was introduced to simplify the VAT recovery process between member states. Companies can use a centralized portal under the directive to present their claims to another member state.

Whilst there are certain local laws which have to be respected and some differences in the costs that are recoverable, this standardized model made the claim application process somewhat simpler for companies and their agents. Whilst all communication with the ministry is normally done in the local language and certain time restrictions are applied to appeals.

This recovery model and framework is only available to companies registered within the European Union, meaning that when the transition period ends on the 31st December 2020, UK companies will no longer be regulated by EU tax regimes. Consequently, UK companies will have to recover all future VAT funds form the EU using a slightly different framework known as the 13th Directive.

The 13th Directive

The principles of the 13th Directive are essentially the same as the 8th Directive, the key difference is that this recovery framework exists for companies registered in countries which are outside of the EU.

In the main, VAT is still recoverable on the main goods and services which are recoverable under the 8th Directive but there are some exceptions in each country and require the presence of a reciprocal agreement between the two countries.

The procedure for the claim process is significantly different. There is no centralized digital portal for claim submission and all claims should be presented in accordance with the local legislation in each country. Claims are paper based and must always be submitted using original invoices, prepared in the local language of the country and in some cases, claims can only be presented by a tax representative who is registered in that country.

The claim and reimbursement timelines also differ, with tighter deadlines for claim submission and a less favorable reimbursement process, ultimately meaning “slower”.

Diesel Excise Duty – France, Belgium, Spain, Italy, Hungary & Slovenia

EU Hauliers are able to claim various excise duty rebates from various countries in relation to their fuel purchases on the continent. This rebate is in addition to the VAT that is recoverable and is governed and managed by a separate process.

Rebates can be as high as 25 cents per litre of diesel, although the rates are variable and can change without notice. That said, this rebate forms an essential contribution to a company who is refueling on the continent in the countries where the rebates are applicable.

The Brexit Effect

Under the current legislation a company and its vehicles must be registered within the EU to qualify for this rebate. The rebate falls under the EU Tax regime and is therefore still recoverable by UK transport companies during the transition period.

Post transition period…

As things currently stand, once the transition period expires on the 31st December 2020, UK based hauliers will no longer qualify for this rebate effective 1st January 2021 due to the qualification rules.

Any retrospective claims up until the 31st December 2020 which will be presented during 2021 will be honoured by the respective countries. It will not be possible for UK countries to claim any further diesel excise rebates in Europe.


As a business with over 15 years’ experience in the EU VAT & Tax recovery sector and with offices both in the UK and Spain, Vrio is ideally based to manage your EU VAT claims in and around Europe. A multi-lingual team with over 50 years of collective experience with detailed knowledge of the 8th & 13 the VAT protocols, Vrio is your trusted partner when it comes to VAT recovery.

Call us today on 0845 313 2212 for more information.