What type of expenses can I claim a VAT refund on?

Businesses can reclaim VAT on a range of eligible expenses, which can be defined in three different groups:

  • T&E (Travel & Entertainment Expense) relate to business expenditure incurred by travelling employees while doing business abroad. Typical T&E would be accommodation, meals, transport costs, marketing costs, costs incurred in relation to participating in an event, an exhibition or a conference, etc.
  • AP (Account Payable invoices) itemizes a transaction between a buyer and a seller and typical examples would relate to professional services, equipment, consulting & legal fees, research & development.
  • IC (Intercompany Expenses) refer to internal transactions between two associated companies who file a consolidated tax return or financial statement. Good examples would be office expenses, legal costs, cross-border sales/indirect goods, administrative/financial support, international project, international infrastructure charges, warranties and so forth.

In all cases, the incurred expenses shall be justified in terms of the nature of the business and this is what normally the tax authority requires the claimant to prove.

Typically, T&Es are paid through the medium of company credit cards, issued for all travelling employees and in some extremely rare cases – in cash. This is why we have designed a solution allowing credit card data transactions to be analysed so that we may provide our clients with a VAT opportunity report, even before we have reviewed the invoices (scans or originals).

AP and Intercompany invoices are normally covered through a bank transfer between the organizations.

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