Maximize travel expenses with VAT reclaim

There are many advantages tied to business travel. In fact, for some, it’s a crucial aspect of building relationships, scaling operations, and networking. But at what cost? Due to the intricacies of VAT recovery, many business travel expenses are simply considered part and parcel of the industry, be it for marketing, tapping into new markets, or attending conferences and events. However, many businesses fail to realize that many associated costs may be eligible for VAT recovery. Here’s how. 

Recovering VAT on business travel expenses

The first step is to get familiar with the VAT reclaim scheme in the country where your team will make the transactions. Let’s start with the basics – foreign VAT recovery. If your business is incurring VAT abroad during business trips or incentives, you’re most likely eligible to reclaim the VAT portion on those expenses. However, as mentioned above, this heavily relies on the foreign VAT recovery scheme of the relevant country and which travel and entertainment (T & E) costs are eligible for reclaim. Speaking of eligibility, let’s look at some of the most common qualified expenses within travel and entertainment. 

What classifies as Travel and Entertainment (T & E)? 

Simply referring to ‘travel expenses’ is a vast scope. A successful VAT claim on travel expenses primarily relies on a deep understanding of the smaller details. With that said, let’s zoom in. For starters, what is your VAT potential regarding travel expenses as a business? Most companies can recover VAT on Travel and Entertainment costs if they:

  • Have employees who travel for work purposes.
  • Frequently attend or exhibit at trade shows, conferences, or exhibitions.
  • Fall within the pharmaceutical, automotive, or manufacturing industry.
  • Offer cloud-based solutions and require servers housed in multiple jurisdictions.

Recovering Travel and Entertainment costs

Now that you’ve confirmed that you are incurring VAT on travel expenses overseas, it’s time to maximize your VAT potential. This means looking closer at your internal organizational structure and how it may impact or influence recovery. For example, what does the spend visibility look like across departments? Are all team members informed of their responsibilities regarding recordkeeping and invoicing instructions? Eligible expenses can be hidden in the most unassuming places, and the only way to recover the expenses is to find them in the first place. 

Educating your team on invoicing instructions

Although the VAT processes may seem unpredictable, one thing stands true: invoices are quintessential. However, even if your team has managed to hold onto the invoices, the invoices must have the correct information. What information? Like most things in the VAT landscape, the tax authorities of each country have specific requirements. One of the most significant requirements across most jurisdictions is that your supplier or seller must be VAT-registered in the country you claim from. In the event that your invoices are not compliant, VAT IT has a team that is ready and able to contact the suppliers to obtain the correct invoice. 

Travel with VAT IT in the passenger seat

Naturally, significant savings often slip through the cracks, especially when navigating international VAT processes and legislation. Fortunately, you don’t have to drain critical resources to claim VAT on travel expenses successfully. Instead, claim up to 25% of your overseas business Travel and Entertainment spend in your VAT refund claim with a team of experts to guide you through every step. 

Leverage the combined power of our industry-leading technology, efficient processes, and our specialist team with over 20 years of experience. 

Are you keen to learn more tips and tricks about recovering Travel and Entertainment expenses? We’ve got you (re)covered.

Interesting Related Article: “The top pros and cons of travelling for business