The VAT expert's eye
VAT is a tax which, in principle, is neutral for your company. If your company buys goods or services with VAT from abroad, it can claim this VAT back from the local treasury, which may offer a significant opportunity to reduce tax costs.
However, to achieve this result, your company must respect the rules of the VAT game, including 5 major principles:
- Improve your internal VAT recovery process (by tracking all expenses with foreign VAT)
- Ensure that local VAT has been correctly invoiced by the supplier
- Check whether VAT is fully or partially recoverable in the country
- Receive an invoice from your supplier with all mandatory details (name, address and relevant VAT number of the parties involved, detailed description of goods or services, etc.)
- Use the correct refund procedure
If your company fails to comply with any one of these 5 key principles, it may never recover the VAT paid on its expenditure.