WORKING WITH DG ECHO AS AN NGO FPA
As a rule, the Partner should apply for VAT exemption.
If the exemption is obtained, the VAT will not be considered as an eligible cost of the action.
On the contrary, whether the VAT cannot be refunded, it may be considered eligible, if the following conditions are met:
the partner must be able to demonstrate that it requested the exemption from the relevant authority (e.g. recent copy of letter sent to the tax authority)
the partner must be able to show the response of the tax authorities, or the applicable legislation which stipulate that VAT cannot be refunded.
The evidence does not have to be included in the Final Report, but must be available for Audit. In some cases, a copy of the applicable legislation may also be accepted as a proof of lack of VAT-exemption. In case there is no reply from the relevant authorities, the letter from the Humanitarian Organisation or its legal councel requesting the VAT exemption can be considered as a proof that VAT exemption was requested.
VAT rules are the same for implementing partners than for the lead applicant. The IP has to request an exemption and should be able to prove that it had requested the exemption.
The VAT status of the partner both at HQ and at field level should be indicated upfront in the section 10.7 of the Single Form and actualised in the final financial report.
Please note that when a partner receives a reimbursement of costs after the receipt of the final payment and VAT had been already paid by ECHO, it is necessary to reimburse these amounts to ECHO. In such cases, the partner should contact ECHO, which will issue a recovery order.
For VAT contact: ECHO-LEGAL-AFFAIRS@ec.europa.e
SINGLE FORM GUIDELINES, SECTION 10.7