How to reclaim VAT on business travels and save money?

VAT Refund for EU businesses

Most European countries offer Value-Added Tax (VAT) refunds on certain goods or services purchased while on business trips. Most of the expenses specifically related to travel
and entertainment and non-travel-related expenses such as employee relocation and training courses in some Member States qualify for VAT refunds. Under the VAT refund scheme, to be eligible for VAT refund an entity should not be VAT-registered or established in the countries from which they are making the claims. All claims must be filed according to the local rules and are audited by the local tax authorities. Non-EU companies are also entitled to claim VAT refunds on expenses incurred on business activities through a specific procedure.

Time & amount limits

Time limit to make the claims is until nine months after the end of the prescribed year (30 September) for EU businesses. Companies can submit annual or quarterly claims. There is no maximum claim limit, however, the minimum limit varies from one state to another.

Complex VAT legislation

Each Member State has its requirements in what you can claim. Some may require main codes and sub-codes to describe the goods and services purchased. If an invoice includes more than one item, then the highest expenditure is used. The Member States also require the invoice amounts to be expressed in their currency or else they will reject it. If the claim is for an invoice in Euro where Euro is not the national currency, it must be converted using the exchange rate as of the date of the invoice.

The level deductibility of the VAT linked to the goods and services provided also differs from a country to another. VAT4U created the first interactive VAT map helping to visualize the VAT rates applied in the different EU Member States as well as the deductibility potential.

Untangling the changing complexity of VAT legislation requires personnel who maintain in-depth and latest knowledge of the regulations throughout Europe and who can read and write the appropriate local languages. The sheer work involved in paperwork and the administrative nightmare often discourages most companies from processing VAT Refund claims. Each year more than 3 billion EUR are lost by businesses.

Help is at hand

If the company conducts a significant amount of European travel, using VAT4U is the wisest business decision to make. VAT4U will guide you through this end to end process, calculate your VAT refunds, process your refund application. VAT4U can also communicate with the local tax authorities and have experience with their unique requirements. With VAT4U, your refund claims can be expedited for prompt returns and maximized payment. In addition, you can connect VAT4U to your current travel expenses management application.

Our expertise in structuring the financial and operational processes for on-going VAT refund management has saved companies millions of Euros. Register now for free.