What is VAT?
Value Added Tax (VAT)is an indirect tax levied on the supply of goods and services that can add between 5 - 25% to your organisation’s foreign business expenses. It is levied at every stage in the business cycle, itemised on the invoice and paid to the government in each state with the cost ultimately borne by the end consumer. VAT was established to encourage cross-border trade from one county to another, and was designed to be neutral to businesses if they go through the effort recover their foreign VAT.
Applicable VAT rates vary from country to country and the tax is recognised under different names, including IVA (Italy), GST (Canada, Australia), MWST (Germany, Austria), TVA (France, Belgium) and MOMS (Scandinavia).
Why Can Foreign VAT Be Recovered?
In order to encourage international trade, the European Union introduced legislation in the 1990s enabling businesses to claim back VAT paid on expenses incurred while doing business in member states. VAT is refunded from the EU under the 8th Directive, which enables EU companies to reclaim from any member state, and the 13th Directive, which allows businesses established outside the 27-member bloc to claim. A number of key non-EU territories, including the US, Japan, Canada and South Korea, also refund VAT thanks to reciprocity agreements.
What is Eligible for VAT Recovery?
Alliott Hadi Shahid can secure foreign VAT refunds from 41 countries on a range of travel and entertainment (T&E) expenses including:
Trade fair and conference costs,
Meals, accommodation and business entertainment,
Travel and transport costs,
Advertising and promotional costs,
And many additional expenses.
AHS can also maximise your refund potential by identifying a range of additional expenses possibly eligible for VAT reclaim including: corporate travel, import VAT refunds, warranty services, inter-company expenses, and haulage and transport costs.