Foreign VAT Reclaim: Opportunities for Refund

We often mention the significant financial opportunity the foreign VAT reclaim scope holds for a business. But the golden rule of VAT recovery clearly states: “To recover it, you have to see it first.” So, how can companies better identify foreign VAT reclaim opportunities and eligible expenses in their industry? We’ve got you (re)covered! Here’s a look at some of the most common high-value international expenditures regarding international refunds that need to be on your radar. 

Identifying foreign VAT reclaim opportunities

Before diving into what your business can reclaim, it’s critical to keep in mind that although you can rightfully claim eligible expenses as a non-resident business, the process varies on a country-specific basis. This means that what constitutes an eligible expense in one country may not be in another. In addition, each country is subject to its own local legislation (which is prone to change), VAT treatment, rates, classification, return process, and deadlines. Keeping this in mind, businesses are urged to leverage the help and guidance of experts in the foreign VAT reclamation process to ensure that they maximize their return potential while mitigating any areas of non-compliance. 

However, even with the help of VAT experts in your corner, there are a few common high-value expenses that a business can self identify and recover. Understanding their impact and reclaiming potential is the first step to elevating your business finance. However, this means knowing what to look for and holding onto those invoices. Here’s a start. 

Travel and entertainment expenses

One of the most significant yet overlooked VAT reclaim opportunities is VAT on Travel and Entertainment (T & E) expenses. VAT on T & E generally includes business costs related to international travel and activities related to business objectives. This includes accommodation, transportation, restaurants, and entertainment costs. However, the success of the VAT refund heavily depends on a company’s ability to attain and retain the correct invoices according to the foreign VAT invoicing instructions, deadlines, and reporting requirements. Some countries are known for having more favorable VAT reclaim processes for non-resident businesses. Due to this, certain countries become more popular for international business travel and entertainment. The recoverability of entertainment expenses are also known to vary depending on the reclaim country. However, some standard recoverable costs include hospitality expenses related to business activities, such as business meals and events hosted  for potential clients. . 

Meetings, events, conferences, conventions & trade shows

As a business grows, so does its foothold in the international market. Naturally, this often involves global networking and marketing and frequently attending trade shows, meetings, events, and conferences abroad. Needless to say, with a big trip comes an even bigger budget. However, up to 27% of these costs are VAT recoverable. Non-resident businesses can receive a significant portion of their annual meeting, incentives, conferences, and events (MICE) spending. Recoverable costs often include VAT on event registration, marketing, attendance, transport, accommodation, and sponsorship fees.

However, T & R and MICE expenses are only the tip of the iceberg when maximizing your VAT reclaim potential. But that’s a chat for another day (or today?). In the meantime, some additional international eligible expenses worth exploring include: 

• Equipment purchase, rental, and maintenance
• Tooling and molding costs
• Marketing costs
• Costs relating to installation of displays
• Hotels & Accommodation costs
• Foreign supplier expenses
• Restaurants/food expenses
• Taxi fares and other transport services costs
  
  

Maximize your international VAT refund potential without the heavy lifting

Fortunately, you don’t have to get caught in the never-ending rabbit hole of identifying, assessing and reviewing hundreds of invoices to no avail. Rather, tap the VAT IT experts into your corner and (re)cover the entire process in one centralized platform. WIth our experts in foreign legislation, industry specific VAT reclamation masters and state-of-art tech, we make companies feel at home within the foreign VAT refund process while maximizing their yield and ensuring 100% compliance. 

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