Value Added Tax (VAT)

What is Value Added Tax (VAT)?

What is Value Added Tax (VAT)?

Value Added Tax (VAT) is a consumption tax charged on the supply of goods and services. VAT works similar to sales tax in that every time you make a purchase, VAT is also applied.  This charge can be between 5 – 27%, which is added to your company’s business travel expenses. Applicable VAT rates vary from country to country and the tax is recognised under different names, including IVA (Italy), GST (Canada, Australia), MWST (Germany, Austria), TVA (France, Belgium) and MOMS (Scandinavia).

Reclaiming Value Added Tax (VAT) on business travel expenses.

VAT was established in the EU to encourage cross-border trade from one county to another. It was designed with the ability for businesses to recover this VAT on their business travel costs. Businesses can usually reclaim the majority of VAT paid on eligible expenses, subject to fulfilling nominal criteria. The applicable VAT rate varies from country to country, as does the list of eligible business expenditure.

VAT reclaim is an opportunity to reduce business costs and put money back in your budget. International VAT can be complex, time-consuming and challenging. Our international team of tax specialists will ensure that your VAT is managed in the most effective, cost-efficient and law compliant way.

VAT can also be reclaimed on AP (accounts payable) invoices.

Registering for VAT: what do I need to do?

Value Added Tax (VAT) registration is required by law for businesses carrying out taxable supplies in a particular jurisdiction. You’re liable to register for VAT in any EU country if you are operating within that country. The obligation to register for VAT depends on different factors, such as service performance, the destination of the goods, and country policies.

You will be required to monitor your registration obligations, and be updated on country legislation regarding registration. Failure to register for VAT correctly or in time in a jurisdiction may result in high penalties for your organization that could be easily avoided.


For more information VAT please check out our VAT FAQ page.

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