Originally Posted by Nicola
If you ship outside the EU to a non EU citizen you don't charge VAT. That's not a refund. There isn't a VAT to refund. Now that doesn't mean they have to charge less .
Ok, I don't know how the vat system works for other jurisdictions. But here in Ph, when you make a sale to a nonresident, it is considered as an export sale, which is subject to VAT at zero rate. That means you don't pass off vat to your non resident customer. If you don't pass off the VAT, then the price of the sale should be lower. Now as a business entity who rendered an export sale, you can claim your unutilized input VAT from the government. If most of your sales are export sales or those subject to zero rate, then the input vat you will just accumulate since you can't pass it off. That's why you file a refund.