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Companies doing business abroad often incur foreign VAT on invoices. These businesses cannot recover this VAT through their own domestic returns. For example, a Spanish company receiving hotel bills for staff visiting Germany cannot reclaim the German VAT through their Spanish VAT return. VAT Recovery is the process of reclaiming this foreign VAT back.
Click here if you would like a free VAT Recovery Starter Pack.
What VAT can be recovered?
Each country implements its own rules on what can be reclaimed from abroad. Typical costs include:
Hotel and accommodation
Restaurant meals
Telephony
Exhibition, event and conference costs
Marketing and promotional costs
Diesel / petrol
Road tolls
Car rental
Equipment and tooling purchases
Certain professional fees
The rules vary enormously between countries. Below is a downloadable summary for major European countries.
Click here to download a table of recoverable VAT on expenses across Europe
How can VAT be recovered
Companies must file a special form, backed-up with legal documentation, and then submit the paperwork to the relevant foreign VAT authorities.
This is a complex and confusing procedure:
- Claims are often only successful if they are completed in the local language.
- If there is a query or hold-up on the claim, many VAT authorities can be very reluctant to deal with 'foreigners', particularly on the phone.
- The rules in different countries are not uniform for reclaims (see above), and change frequently.
For example, in the UK entertaining costs for staff are deductible, but disallowed for clients; however, in France it is the reverse!
This is where TMF can simplify the whole process.
How can TMF help?
TMF is expert at getting VAT back for European and non-European companies. Its 35 offices around Europe are able to submit claims in the local language, and speak directly to the VAT authorities on behalf of clients. This helps speed up the process, and ensures clients receive their cash back as quickly as possible.
To process the claim, TMF typically needs:
- The original invoices;
- A copy of the company's VAT / Tax certificate; and
- A letter of authority.
It will then check the VAT on the invoices to ensure they are reclaimable, prepare the claim and submit it to the national authorities. If there is a hold-up, TMF can speak directly to the relevant VAT authority and resolve any queries.
Non-European companies
TMF can also help non-European companies recover their European VAT. It is a requirement that the company's home state has a reciprocal VAT agreement - TMF can advise on this. Some countries require a Fiscal Representative to be in place before granting non-European companies refunds, e.g. France. TMF can provide this.
Contact your local TMF VAT office to find out how to get VAT back quickly and improve your cash flow.
Click here to see how TMF can reduce your cash losses on EU VAT
+44 (0)870 067 8881
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