2 mins | September 6, 2023

International business travel expenses: What can businesses reclaim?

Although foreign reclaim sounds great in theory, how can organizations switch the conversation from 'potential' savings to pocketing actual refunds back into their business? The first step is understanding what your business is eligible to reclaim. 
International business travel expenses: What can businesses reclaim?

Businesses are often looking for additional ways to increase revenue. However, the most significant source of savings may be in plain sight - within their international travel invoices and receipts. Here's what businesses may be eligible to reclaim from costs incurred during business travel and entertainment. 


Reclaiming business travel expenses

Often, when planning a business trip, planning the budget can be more challenging than organizing the itinerary. Fortunately, there is a variety of business travel costs that are VAT reclaimable both within the local and international Travel and Entertainment VAT scope. Although that sounds great in theory, how can organizations switch the conversation from 'potential' savings to pocketing actual refunds back into their business? The first step is understanding what your business is eligible to reclaim. 


When can you reclaim foreign VAT on travel expenses? 

Many businesses leave significant savings on the table due to underclaiming on their VAT submissions. The reason? Unidentified hidden expenses. However, the VAT portion of business expenses is fully reclaimable, even when you're a non-resident organization incurring eligible business expenses in a foreign country. The only question, however, is what exactly constitutes an 'eligible' business expense?


Common recoverable international travel expenses

One of the most common errors that hinder the VAT reclaim process is claiming VAT on ineligible expenses. The other side of the coin, however, is missing out on the significant VAT reclaim potential within your business due to underclaiming and not including many expenses that are, in fact, VAT reclaimable. Fortunately, we're here to help guide you through the VAT reclaim process, one eligible expense at a time. 

When navigating through the VAT reclaim process, however, it's important to remember that the VAT treatment will vary depending on the country you're reclaiming for. Therefore, the eligible expenses may differ for each unique country and industry. However, a few common expenses form a good baseline for the VAT reclaim process. Some common eligible expenses within the travel and entertainment reclaim scope include: 

  • Hotel and accommodation costs: Businesses can reclaim VAT on accommodation costs, including hotels and short-stay rentals. 
  • Meals and restaurants: VAT can often be reclaimed on restaurant bills, meals, catering services, and other meal costs related to business activities.
  • Transportation costs: VAT is often incurred on transportation costs, including public transport, corporate car rental, taxi fares, fuel costs, train tickets, parking fees, and other business-related travel costs. 
  • Telecommunication services: A typical hidden cost that businesses often incur during global trips include VAT on international phone calls, internet access, and other communication services used for business purposes.
  • Client entertainment: VAT is also commonly charged for various client entertainment expenses. This includes VAT on costs like sporting events, cultural events, and other costs related to business activities. 

Reclaim your VAT on Travel and Entertainment with VAT IT

The process of recovering VAT on travel expenses can be challenging when considering that the entire process hinges on an organization's ability to identify the specific eligible expenses within each country and adhere to the country-specific VAT legislation, deadlines, invoicing instructions, and reporting requirements. Fortunately, you can replace the heavy lifting with our all-inclusive foreign VAT solution. At VAT IT, we understand the importance of tapping into industry-specific VAT opportunities while ensuring you align all processes with foreign VAT legislation. 

Feeling too late to the party? Did you know some countries accept back-dated VAT reclaims of up to four years? Tap our experts into your corner and maximize your travel and entertainment costs by injecting up to 27% additional revenue into your business. 

VAT refund Tool kit

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Discover which countries your business can reclaim from with our country guides.
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Evaluate your VAT reclaim potential based on your annual Travel & Entertainment expenditure.
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Navigate the intricacies of your invoices. Use our interactive tool to find out what is required to optimise your claims.
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