An Introduction to Value Added Tax and VAT Reclaim: What it means for your business
Everything you need to know about Value Added Tax and how to maximise your reclaim.
What is Value Added Tax?
Value Added Tax (VAT) is an indirect tax levied on the supply of goods and services that can add between 5 – 27% to your company’s business travel expenses. Applicable VAT rates vary from country to country. This tax is also recognised under different names, including IVA (Italy), GST (Canada, Australia, India), MWST (Germany, Austria), TVA (France, Belgium) and MOMS (Scandinavia) just to name a few.
Reclaiming VAT on business travel expenses.
In order to encourage international trade, the European Union introduced legislation in the 1980s enabling businesses to claim back VAT paid on expenses incurred while doing business in member states. This is great news for companies involved in foreign business travel, but it can also be daunting. Managing VAT is complex, time-consuming and tedious, and many organisations only recover a fraction of what is owed to them.
What can a business reclaim VAT on?
Foreign VAT on corporate business travel (T&E)
Employees travelling internationally is a huge expense for businesses. The good news is you can claim back VAT on international travel and entertainment expenses connected to employee business trips, even when not VAT registered in the country where the expenses take place.
Domestic VAT on corporate business travel (T&E)
Domestic VAT, depending on local tax rules, can be reclaimed on local travel expenses connected to employee business trips.
Supplier invoices (AP Invoices)
An average of 70% of all foreign supplier invoices include inaccurate VAT charges, and once paid, it’s extremely challenging to reclaim the incorrect charges. Types of Supplier invoices that you can reclaim include:
- Tooling on production lines; packaging & materials
- Research and Development costs
- Clinical Trials
- Inter-company invoices
- Conferences, Events, Sponsorship
- Marketing, Training, Samples
Import and Export VAT
VAT on cross-border transactions can be as high as 27% on top of all other items and is generally recoverable with other VAT – if managed properly.
Increase your VAT reclaim by 50%
Taxback International combines innovative technology, deep industry expertise and value-added partnerships to deliver comprehensive VAT solutions that maximise your VAT reclaim while minimising your risks, so you can focus on growing your business. We eliminate your VAT burden completely while providing real-time visibility with every step of the way, making compliance and recovery effortless for our clients.
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Deadlines for compliance with new invoice processing and storage rules for Portugal.
15th August 2019: Everything you need to know about Portuguese taxpayer deadline extension.
Businesses must begin to prepare for EU VAT amendments in 2020.
16th December 2019: Several ‘quick fixes’ to the EU VAT system will impact B2B intra-community supplies and are expected to have considerable implications for businesses trading internationally.
Expected VAT rate changes in 2020.
12th December 2019: Czech Republic, Hungary, Ireland and Poland are amongst the countries to be impacted by VAT rates changes in 2020.