International VAT Reclaim – What you need to know…

VAT-ReclaimOver the course of a year, how much money does your organisation spend on foreign services and business travel in Europe? For many multinational businesses the ­spend is in the millions. If you conduct business or travel in countries with Value-Added Tax (VAT), or its equivalent, then you’re paying large sums of money which you have the right to recover.

VAT is a ‘consumption tax’ applied to many goods and services in Europe and other countries worldwide. It is intended to tax the end consumer, not companies conducting business outside of their home country.

The process of recovering VAT expenses can be very complex. Its intricacies start with the large number of VAT-recoverable expense, which vary for each country. The spectrum of expenses your company incurs when traveling to and visiting other countries on business is extensive, but a great deal of the VAT on those expenses can be reimbursed. Some of these include:

Business Travel

You can reclaim VAT on your business travel expenses, including:

  • All types of accommodation
  • Meals
  • Car rentals
  • Domestic travel including flights, taxi, train
  • Petrol
  • Phone and internet charges

Supplier Invoices

As an international business, you are likely to buy services from foreign suppliers – VAT is still applied on some of these expenses and is often considerable and refundable.

Seminars and Professional Training

Businesses commonly require their employees to attend seminars, meetings, courses or other forms of professional training. When employees participate in any such event, you can recover the VAT charged on their attendance.

Exhibitions and Tradeshows

Similar to seminars and professional training, you can also recover VAT charged at exhibitions and tradeshows in which your company participates. The eligible expenses include stand rental, resurrection, installation, signage, marketing material and other expenses charged with VAT related to exhibiting at these events.

Exports

If your company sells goods and services to international customers, these may be charged with several kinds of taxes, including import taxes and taxes on foreign purchases of equipment. In certain circumstances these taxes are refundable.

Additional Business Expenses

There are many other kinds of business costs to which VAT is applied. Some of the more common ones include expenses for foreign representative offices, international sales agents, property rentals, and logistics.

Aviation

There are many expenses specific to the airline industry as well as for those organisations using corporate jets. Other refundable VAT is levied on ground handling services, repairs, crew expenses and more.

To qualify for a VAT refund a business must NOT:

  • Be based in the refund country during the VAT claim period
  • Have supplied goods or services there, except
    • Exempted transport & ancillary services
    • Supplies to customers liable for payment of the related VAT under the reverse-charge mechanism

By consulting a VAT reclaim specialist, the recovery of VAT expenses can be managed much more efficiently and accurately, avoiding costly mistakes and company time when done in-house.

If you think you may have a suitable claim, please get in touch with the EFM team to set up your free one hour consultation. Contact us via email or call 01582 516300.