As the world marches further into the digital age, there have been corresponding increases in the volumes of exports and imports. On the other hand, this all gets complicated in terms of how tax laws impact international business. That’s a big reason why many businesses wind up facing issues of tax fraud. While this is going on, businesses might also pay a lot of money for travel in overseas countries. Given how many of these expenses can be deductible, those monies can be potentially recovered if those businesses follow the appropriate filing procedures.
This can be a great way for businesses to save some money and get back funds on VAT that they fully deserve. Read on and get an idea of how you can do so.
Just What Is VAT? Who Can Get Refunds?
VAT is a kind of tax that many nations around the world levy on consumables. The majority of tax laws support VAT refunds for businesses that might not be based in that actual nation. However, for VAT unrelated to travel expenses and entertainment, it’s possible that you’ll have to register prior to claiming any refunds. The majority of registered businesses can get VAT reclaims, provided their particular expenses are actually subject to VAT. On the other hand, regulations surrounding VAT refunds for businesses differ from one country to the next in terms of items and rates that qualify for any VAT refund. If your business is based within the EU, but your VAT registration per the tax laws of your home country, then getting a tax refund is easy. In a similar vein, any business based outside of the EU would need to be VAT-registered in their home country if they want to qualify for business VAT refunds.
What Business Expenses Qualify for VAT Tax Refunds?
Various countries each have their own sets of rates and rules. This makes it hard for anyone to stay on top of specific applications. For instance, the nation of France only gives VAT refunds covering hotel expenses for third parties. Meanwhile, the UK will only grant hotel refunds for employees, and Germany will refund the whole amount without worrying about who spent the actual money. In general, most nations will honour the following expenses as VAT deductions:
Fuel expenses and car rentals
Meals and hotel accommodations
Taxi costs and public transportation
Business conferences and trade shows
Professional fees and marketing expenses
Travel delegations, services, and intercompany seminars
Installations, maintenance contracts, and drop shipping
Logistics and import VAT
Use These Tips To Boost Your Odds Of VAT Recovery
Whenever you fill out a VAT business refund application, use the following tips to raise your chances of gaining a full refund.
Every time that you deal with this, make sure you submit any original copies of your invoices. These are clearly identified because the word ‘invoice’ is printed on the documentation. That might be in English, but corresponding local languages also happen.
When you make purchases, ask for more than just the credit card slip or proforma invoice. These aren’t acceptable for tax refunds.
It’s always wise to be sure your invoice has a business address instead of a personal residential address.
Complying with all supporting documents is essential. If you’re not familiar with a nation’s laws, consult an expert for assistance.
All EU claims need to get filed before the end of September, whereas claims in countries outside of the EU have to be submitted before the end of June. Be sure that every claim gets received.
What Can Be Claimed
If you’re looking for a list of things that you can claim back via VAT, then you’ll be happy to know that there is a broad variety of different items that can be claimed as a VAT refund. This will provide you with the chance to make your finances healthier than they already are and can be a notable benefit to businesses that are in tighter financial circumstances than the average.
If you’re looking for some advice on what can be claimed and what can’t then this piece of content from VAT IT covers a lot of what you need to know. It’s a nice piece of content that compiles a large amount of what is acceptable as regards returns.
It’s essential that you satisfy VAT reclaim requirements. It’s also crucial that you respond to any questions you get from the relevant authorities as quickly as you can do so. More than anything else, it might be a good idea to start using something like the right claim-management software to assist you in all of this.