How to request a monthly VAT refund?

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Until a few years ago, only large companies and exporters could request a monthly VAT return. The rest had to wait until the end of the year. Currently, and as an exceptional regime, monthly VAT returns are possible . Below we will see how the procedure works and who can request it. But, first of all, we will briefly summarize how the VAT return works.

The VAT declaration
The Value Added Tax is a tax levied on consumption, and self-employed workers and companies are passive collectors of it. Thus, when selling a product or service, companies must collect the tax and then pay it to the Public Treasury. From the self-employed person's point of view, this would be the VAT charged .

On the other hand, self-employed malaysia number data persons and companies need to buy goods and services. These, in turn, are also subject to VAT. This type of VAT is called input VAT .

Self-employed workers must balance the VAT charged and the VAT paid in order to pay the corresponding amount to the Tax Agency. However, in some cases, it is the State itself that must reimburse the entrepreneur for having borne more VAT than it has charged. At this point, it is important to remember which expenses are deductible in VAT .

This balance is reflected in the VAT declaration that is made every month or quarter. And it is the entrepreneurs themselves who will decide which option is most beneficial for their business.

Requirements to request the monthly VAT refund
The general VAT regime establishes that when the difference between the VAT paid and the VAT charged is positive, the tax refund must be requested at the end of the year. However, Royal Decree 2126/2008 established an exceptional regime for monthly VAT refunds.

In order to exercise the right to a monthly refund, taxpayers must be registered in the monthly refund registry .

How to apply for registration in the Monthly Refund Registry?
Registration for the Special Regime for Monthly VAT Refunds can only be done in November. To do so, you must submit form 036, and it will come into effect the following January . That is, those who want to register during 2016 will have to do so in November. And they will be able to start processing the monthly VAT refund from January 2017.

When companies opt for this regime, they are obliged to remain in it for at least one year. And they cannot cancel it until the following November. Likewise, it will come into effect in the following January. In the example above, the company would be obliged to file the VAT declaration monthly, at least, until December 2017 and would have to request cancellation in November 2017. After cancelling, they will not be able to request registration in the Monthly Refund Regime again until November 2018.