Can you claim import VAT back?

If you’re here for the short of it, yes - your business may be eligible to claim back import VAT. However, the success of your claims and the reclaim potential depends on understanding the process and complying with niche industry and country regulations. Fortunately, we’ve got you covered. Here’s what you need to know to untangle some of the complexities surrounding import VAT and whether your business can rightfully claim back expenses incurred. But first, let’s start with the basics. 

Reclaiming import VAT

Import VAT is known for being complex, and navigating customs can be tedious and time-consuming without some expert guidance. However, to prevent businesses from feeling entirely in the dark, there are a few fundamental aspects to reclaiming import VAT that all companies should be familiar with. 

Eligibility

Although you may have import VAT reclaim potential, as with all things in the VAT landscape, specific rules apply. In general, eligibility criteria to claim import VAT include the following:

• Ownership: An entity must own the goods to reclaim the import VAT.
• Legislative requirements: The country where the goods are imported must have provisions for reclaiming VAT.
• Taxable activities: The imported goods must be relevant to the claimant's taxable activities and business purposes.

Documentation

Another critical aspect of successful import VAT recovery is submitting the correct documentation. This includes commercial invoices, shipping waybills, customs clearance entries, and duty and tax payment receipts. This may often prove challenging as the documentation needs to comply with country-specific invoicing instructions and requirements. 

The import VAT rate

Various factors determine the import VAT rate, impacting the reclaim potential and ultimate refund yield. The amount of import VAT will generally depend on the country-specific rate where the goods are being imported, the value of goods (including customs duty, freight and insurance for example), the types of goods being imported, and whether or not any exemptions or special rules apply. 

The VAT return application

Your import VAT claim application will heavily depend on the country-specific VAT system. However, in general, two standard methods exist to reclaim import VAT as a business. In some countries, companies may be eligible to reclaim import VAT through their VAT returns. The import VAT will then be offset against the VAT charged on sales, and businesses will receive a refund of the excess VAT or carry it forward. Alternatively, companies may be eligible for a separate VAT refund application. This is beneficial for businesses looking for foreign VAT reclaim solutions without necessarily having to register and charge tax within the relevant country.  

Claim import VAT without the burden

It’s too easy to get tangled up in the complexities of VAT reclaim, especially regarding cross-border transactions. Fortunately, you can fast-track the recovery process, bypass the administrative burdens and maximize your savings potential in one fell swoop. Allow our VAT reclaim experts to take over the reins so you can enjoy smooth, stress-free, and compliant VAT recovery for all your business needs. 

Curious about whether or not your industry has import VAT reclaim potential? Find out here.