Companies are missing opportunities to reclaim VAT on Accounts Payable invoices
Did you know that $30 billion in VAT goes unclaimed each year? VAT on Accounts Payable (Supplier) invoices contributing a significant figure to this!
Most global businesses have suppliers located all over the world. Expenses incurred through these foreign suppliers are material and attract significant foreign VAT, but many companies are not aware that this cost is refundable. Purchasing goods or services cross-border results incur foreign VAT and there is a significant opportunity for foreign VAT reclaim that may be going unnoticed. By identifying foreign VAT charges on the accounts-payable side, significant amounts of revenue can be generated.
Each country has its own specific deadlines and rules, with different administrative practices for filing. This makes identifying and qualifying opportunities for AP VAT refunds across multiple jurisdictions very time consuming and difficult for internal staff to manage. Operating in worldwide markets requires VAT expertise and knowledge in legislation, foreign language support and relationships with the local tax offices to effectively manage the VAT refund process.
When can I reclaim VAT on accounts payable invoices?
Your company is eligible to recover VAT on accounts payable invoices in eight business spend categories:
- Tooling (find out more)
- Training and events
- Professional services
- Premises rental and purchase.
- Supply and installation
- Airline and aircraft operator expenses
- Meetings, incentives, conferences and events (MICE)
- Import VAT
Don’t miss the opportunity to reclaim up to 25% on projects abroad.
Foreign VAT that has been paid on certain types of business transactions is often missed by finance departments. Our research has shown that the main reasons for this include:
- Without the trained eye of real VAT experts, companies are not aware of the foreign VAT reclaim opportunity on accounts payable invoices. Many accounts payable invoices also fall outside the standard procure to pay process, and therefore are more difficult to identify.
- Reclaiming VAT on foreign AP invoices is subject to time limits which are dictated by local tax rules. Companies only have a limited window of opportunity to seize their VAT refunds.
- VAT can often be charged incorrectly by suppliers, meaning the wrong VAT amount is paid by businesses. This is reclaimable via the supplier but requires specific knowledge to identify.
Taxback International can help your business.
We provide a complete accounts payable foreign VAT reclaim solution:
- AP Planning: Consultancy on the correct way to handle foreign VAT on projects abroad considering
the full place of supply roadmap for each project.
- AP Screening: Check all invoices to identify incorrectly charged foreign VAT, resulting in cash-flow optimisation by not paying VAT where it is not due.
- VAT Reclaim: Correctly charged VAT is recovered via tax office application. The incorrectly charged VAT is recovered from suppliers.
Taxback International has 20+ years’ experience dealing with all global tax jurisdictions. We understand all of the local VAT practices in over 180 countries to guarantee maximised VAT refunds on foreign accounts payable spend. Our fully-managed process for identifying the eligible VAT amounts makes it easy and quick for your business to maximise your VAT reclaim. We will ensure that all eligible business spend is included, no matter how big or small. Reach out to us directly or contact us via email on firstname.lastname@example.org to start a conversation with a real VAT expert