by on August 6, 2024 with No Comments

Can VAT be reclaimed abroad?

When a company incurs business expenses in another EU country, it is entitled to reclaim the VAT paid on these expenses if it complies with the procedural rules and deadlines.

This applies, for example, to hotel, restaurant, taxi and car hire costs, or admission fees to conferences.

Let's take an example

An employee of a company travels around Europe to meet customers. He incurs various expenses during his trip: hotel, taxi, restaurant, entrance ticket to a trade fair, etc.

In principle, the company can reclaim VAT on these expenses. To do so, it must submit an electronic refund request to the country concerned (via a portal accessible from its place of establishment) and attach the invoices before 30 September of the following year.

Why do so many businesses fail to recover VAT abroad?

Many businesses neglect to recover VAT abroad, thereby losing considerable sums of money.

There are several reasons for this:

  • Amounts deemed too small: It is true that for certain individual expenses, the VAT recovered may seem negligible. However, over the course of a year and for all the expenses incurred abroad, the amount can be substantial.
  • Unfamiliarity with procedures and deadlines: The process of reclaiming VAT abroad can seem complex and time-consuming. Many businesses don't know where to start or how to go about it.
  • Lack of time or resources: Managing VAT refund claims can be time-consuming and require specific skills. Faced with other priorities, businesses sometimes decide not to devote themselves to it.

What are the solutions for maximizing VAT refunds abroad?

By adopting the right reflexes and implementing appropriate solutions, your company can considerably optimise its chances of success and maximise its VAT refunds.

Here are a few key points to bear in mind:

  •  Raising awareness and training your employees: It is essential that employees travelling abroad are made aware of the impact of the form and content of the documents (invoices, tickets, etc.) that they will be collecting as they travel. Regular training may be necessary to ensure that information and supporting documents are collected efficiently.
  •  Analyse your expenses abroad: Identify the countries where your company has incurred significant business expenses. This is the basis for reflection. It all starts with a careful reading of the accounts.
  • Quantify the potential gain: Then estimate the amount of VAT you could reclaim in each country. There are expenses (travel, accommodation, restaurants, etc.) for which VAT is not recoverable in certain countries.
  • Get to grips with procedures and deadlines: It's crucial to be familiar with refund procedures and deadlines to avoid making mistakes.
  • Be responsive: Keep a close eye on the status of your refund applications: Monitor notifications and communications from the tax authorities so that you can respond quickly to any requests for further information.
  • Be prepared to contest rejections: If you are refused a refund, analyse the reasons given and prepare a solid argument to contest the decision.

The VAT expert's eye

You can't improvise a foreign VAT refund case.

By adopting a methodical, rigorous and proactive approach, you can maximise your chances of recovering foreign VAT and thus turn foreign VAT recovery into a genuine lever for optimising your costs.

Do you have a question about your foreign VAT refund? Contact us for a free, no-obligation assessment of your VAT situation, and to find out how we can add value to the management of your EU VAT refund.