It's no secret that understanding how to reclaim VAT can be time-consuming, even for relatively small or straightforward businesses. Now, add one of the world's largest industries by revenue into the mix, and things get a bit (a lot) more complicated.
For businesses in the automotive industry, reclaiming VAT can be a resource-intensive process considering complex global supply chains and ever-changing VAT legislation. This begs the question: Do businesses in the automotive sector have to settle for VAT processes that drain resources, expose them to compliance risks, and bring forth little returns?
Absolutely not. The best part? You don't have to be a VAT expert to crack the code. Here's how to reclaim VAT in the automotive industry, maximize your VAT potential, and reduce the administrative burden in one fell swoop.
Bulletproof your domestic VAT recovery processes
As your business expands, you may scale across multiple VAT jurisdictions. This often leads to multiple VAT registrations. Keeping up with the administrative tasks of local VAT recovery can easily hinder your team and lead to common errors in the VAT process. In addition, with all your focus turned toward recovering your local VAT, other significant savings opportunities get overlooked in the foreign expense category. Rather than settle for subpar VAT recovery, lock down the process with one centralized solution designed to deal with high-volume invoices across multiple expense management systems.
Pinpoint industry-specific reclaim opportunities
Another critical point when navigating how to reclaim VAT in the automotive industry is to hone into the niche industry expenses that are eligible for VAT reclaim. Millions in revenue slip through the cracks in unclaimed VAT each year because of unidentified reclaim opportunities. More than overviews and high-level approaches will be needed here. As an organization, get to the nitty gritty of your niche local and foreign business expenses and whether or not you can reclaim the VAT portion incurred. Some common but lesser-known expenses that you may be able to reclaim in the automotive industry include:
- Tooling and molding costs
- Automotive testing costs
- Meetings, events, conferences, conventions & trade shows
- Import VAT
Most businesses only scratch the surface when reclaiming VAT on eligible expenses. The golden rule? Understanding that VAT impacts every part of your business and collaborating with every aspect of the company on a departmental level to see how their role and responsibilities influence your VAT potential.
How exactly? Well, that's where we come in.
Tag experts into your corner
Ultimately, knowing the landscape is the best way to maximize your VAT potential and navigate complex VAT processes. But unfortunately, with many roadblocks on the road to VAT recovery, this often feels easier said than done. Rather than settling for the unknown, tag experts into your corner to understand the niche intricacies of your industry and the specific regulatory and cross-border requirements to ensure smooth and efficient VAT returns.
At VAT IT, we serve many of the world's largest OEMs, system suppliers, component suppliers, and parts suppliers in the automotive industry, and hundreds of SMEs servicing the sector. You're not in it alone. Successfully recover foreign VAT on manufacturing, tooling, imports, automotive conferences, events, and more without compromising your time, people, money, or compliance.
We've got you (re)covered!
Keen to do a further deep-dive into VAT for the automotive sector? Head to our page on Automotive VAT reclaim and discover who can reclaim VAT and how to leverage your competitive advantage with effortless and seamless VAT recovery processes.
Claimable countries & VAT rates
VAT potential calculator
Invoice compliance checklist