Foreign VAT Recovery

Travel and entertainment (T&E) costs incurred by employees while on business trips abroad may be refunded by foreign tax authorities. Accommodations, food, taxis, auto rentals, public transportation, and conference expenditures are all considered eligible expenses.

Refunds may also be requested for invoices from Accounts Payable (AP), such as those for tooling, facility rental, expert services, supplies, and installations.

The Challenges Of International VAT Refunds

  • Every nation has its own unique standards and deadlines, as well as various administrative procedures for filing.
  • Operating in international markets necessitates legal knowledge, assistance for foreign languages, and connections with regional tax authorities.
  • Due to a lack of information or resources, businesses frequently file incomplete claims.
  • Reclaiming foreign VAT is subject to time restrictions. Losing your refund if you miss the window for claiming VAT is possible.

What Is A VAT Refund?

Businesses that have business travellers charged VAT or GST may be eligible for a refund from the host government.

An expense must be within the permitted categories of expenses for that nation and be supported by complete, correct documentation in order to be eligible for a VAT refund (i.e. receipt or invoice).

Refunds in Europe must be requested through the government of the nation in which the company is headquartered, who will then forward the request to the government of the nation where the expense was spent.

Not just for travel and entertainment costs, but for all kinds of expenses as well. The following are some of the most typical eligible expenses:

  • Hotels
  • Car rentals
  • Conferences and events
  • Training
  • Marketing.

Benefits Of Automated or Integrated VAT Recovery

  • Accuracy: OCR and rules are used to review a sizable number of invoices in order to ensure that only accurate data is recorded and used for VAT recovery claims.
  • Global compliance, even for multinational entities: Your partner for VAT recovery is well-versed in the VAT regulations and laws applicable in the countries where your business operates, and remains informed of any updates so that you can focus on your business.
  • No human error: User input mistakes and discrepancies are audited out of the data to verify that it is completely clean using OCR and AI.
  • A hands-off process: To ensure minimal VAT leakage and maximum value, your VAT recovery partner will ask that non-compliant invoices for claimable costs be reissued.
  • Peace of mind: Your partner is in charge of gathering the information and making sure the claims are accurate, so you are protected from penalties for making claims that are untrue or incomplete.

Additionally, you only pay a percentage of the recovered VAT because VAT recovery agents work on a "no cure, no pay" premise. You don't pay anything if you don't retrieve anything.

  • Twitter
  • Facebook
  • LinkedIn
  • Instagram

Recommended Reading

SaaS Bookkeeping: Streamlining Finances in the Digital Age

SaaS bookkeeping transforms bookkeeping into a strategic asset by leveraging cloud technology, automation, integration, and flexible subscriptions. Key features like real-time reporting, customizable dashboards, and mobile access help businesses stay agile and competitive. Choose the right SaaS solution by considering business needs, scalability, user experience, and pricing to ensure long-term success and growth.

Read more

Tax Calendar 2024

The Tax Calendar 2024 provides a roadmap for individuals and businesses, highlighting key dates and actions mandated by federal tax laws, to ensure compliance and financial efficiency.

Read more

How Proper Bookkeeping Streamlines Your Business Tax Filing

Blend bookkeeping & tax services for streamlined business finances: Uncover deductions, simplify tax filing, year-round support. Partner with Fincent for a stress-free financial journey.

Read more