Sabrix

The following text is to inform you of the recent decision reached by the European Court of Justice ("ECJ") on a Latvian case that was referred to it.  In summary, the ECJ has held that Latvian national legislation which imposes a three year limit for refunds of value added tax ("VAT") to taxpayers is not contrary to the principles of equivalence and effectiveness and is therefore compliant with EU law. 

The ECJ held that Member States are entitled to impose time limitation conditions on the refund of VAT to achieve legal certainty, provided that the time limit respected the principles of equivalence (which the Latvian conditions did because the time limit was applicable to domestic and EU-based actions) and effectiveness (the ECJ had previously ruled that a two-year time limit did not offend the principle of effectiveness, and therefore a three-year time limit was also permissible).

I bring this to your attention to point out that input tax refunds in Latvia and elsewhere in the EU may not be available to you indefinitely.  If you have put off the recovery of tax incurred in a Member State where you are not registered because the recovery system was inefficient and not worth your time you should take a second look at the opportunity to recover now under the new 2010 rules.