VAT Refund for Hong Kong Companies

The value-added tax (German: Mehrwertsteuer, MwSt) is an indirect tax levied on every purchase of goods or services either with the standard rate of 19% or the reduced rate of 7% (e.g. hotel accommodation or printed matter). There are a few items which are tax-free, such as telephone and fax expenses as well as postage.

The applicant must be a taxable person with none of the following in Germany:

• Domicile;
• Corporation;
• Place of management;
• Taxable sales; and
• Registered branch.

For VAT refund eligibility, the applicant has to be a company registered in the Hong Kong SAR, including a physical office address (a P/O box only is not sufficient).

Typical examples of value-added tax paid by eligible companies are:

• Cost of exhibition stand construction
• Car rentals, taxi or public transportation
• Hotel expenses
• Purchase of goods
• Service invoices

Please note: All invoices (especially for hotel accommodation) have to be made in the name of the applying company. It is not sufficient if only the guest’s name is stated on the bill. Fuel bills are not refundable.

1. Company details: Apart from contact and bank details, the applicant has to provide information on the occasion under which the VAT payments occurred and the nature of the company’s business.
   Enclosure A
2. Power of attorney (POA)
   Enclosure B
3. Proof of taxable business: This letter is routinely issued by the Hong Kong Inland Revenue Department. The Business Registration Certificate (BR) does not suffice. It is important, that the letter by the IRD states clearly that the applicant had a tax file throughout the relevant calendar year.
   Enclosure C (sample)
4. Commercial invoices and import receipts: The invoices and import receipts have to be issued in the name of the company, be machine-printed and addressed to a physical office address. The VAT amount has to be calculated in the invoice as the difference between the gross and net invoice amount. The documents have to be submitted completely and numbered; single pages are not enough.

The relevant authority in Germany must receive the application for a refund latest by 30 June of the following year. It is not possible to extend this deadline. In order to meet the June 30 deadline for refund applications concerning invoices of the previous year, GIC has to receive the relevant documents by 31 May the following year.

Examples:

1. The applicant was an exhibitor at a trade fair in Germany in 2021. They can file their VAT refund application until 30 June 2022.
2. The applicant was an exhibitor at a trade fair in Germany in January 2021. The application can be filed earliest in April 2021 and latest on 30 June 2023 (see Section 3 below).
3. Invoices which are issued in late December (e.g. 26 December) are deemed by the German tax authorities to be paid in the following year. Therefore, such invoices are routinely filed in the refund applications of the following year.

The taxable company can select the refund period, but:

• This period must amount to no less than three consecutive calendar months.
• It may not exceed one calendar year.
• An exception to this is the remainder of a calendar year. In this case, the refund period may comprise the months of November and December, or December only.

The minimum refund amount per application is EUR 500.00 for applications covering one full calendar year and EUR 1,000.00 for refund periods of less than one full calendar year.

Applicants are requested to fill in, sign and return Enclosures A and B together with all original invoices and documents to:

German Industry and Commerce Ltd.
19/F, COFCO Tower
262 Gloucester Road
Causeway Bay
Hong Kong

T: +852 2526 5481
E: info@hongkong.ahk.de
W: www.hongkong.ahk.de

Enclosure A Enclosure B

View checklist

Thereafter, GIC will send the original application form to the applicant to chop, sign and send it back. GIC will then file the application with the German tax authorities. The processing time until the refund is credited to the applicant’s account normally takes twelve months. GIC will subsequently return the invalidated original and rejected invoices to the applicant.

The service fee is 20% of the actually reclaimed amount. Upon completion of the application, GIC will deduct all charges and transfer the balance to the account specified in Enclosure A.

Members of the German Chamber of Commerce, Hong Kong (GCC) may be eligible for a discount.

If the applicant disagrees with the explanation of the tax authority not to honour an invoice for a refund, such decisions may be challenged within six months from the date of the statement.