Why can businesses reclaim VAT?

In order to encourage international trade, the European Union introduced legislation in the 1980’s enabling businesses to claim back VAT paid on expenses incurred while doing business in member states. VAT is refunded within the EU under the EU VAT refund directive, which enables EU companies to reclaim from any member state; the 13th Directive, allowing businesses established outside the 28-member block to reclaim the VAT from the EU territories.

A number of key non-EU territories, including Australia, Japan, Canada, South Korea, also refund VAT/GST/consumption taxes to the non-resident traders via specific refund procedures or under reciprocity agreements in place. For more information please contact Taxback International on info@taxbackinternational.com