International VAT refunds

European legislation was introduced in the 1980s to enable companies to reclaim

VAT (similar to sales tax) is automatically charged on a wide range of goods and services sold within the European Union and some other non-EU countries. The VAT rate varies,

The items that can be eligible for VAT refunds are expenses that have been incurred

• Taxis, car hire and transportation
• Hotel bills and accommodation
• Restaurant meals and subsistence
• Business entertaining
• Conferences, trade exhibitions and training courses
• Marketing and advertising, promotional materials and printing

These vary according to the country and may have restrictions. There are also time limits when making a claim, so it is important to understand the requirements in each country.

Claim eligibility

Before making a claim, a company should check if it is eligible. Most businesses wanting to make a claim should be able to do so if:

• The business is not registered, liable or required to be registered for VAT in the country where the expense is incurred
• The business is EU based and registered for VAT in their home country, or the business is non-EU based and registered for business purposes in the country of their origin
• In the case of non-EU companies, a reciprocal treaty arrangement is in place between its own government and the government of the country it wishes to make a claim in

There are companies which specialise in claiming back VAT and it may be worthwhile using one to do this it can be a time consuming and complicated procedure. An expert will be able to prepare the correct documentation for the tax authority in the country where the claim will be lodged and employ foreign language speakers with knowledge of the procedures. Often these companies work on a % commission of the refund, so there are no upfront costs.

For more information about VAT refunds for EU based companies, visit vat.taxback.com/morevatinfo.asp