What is VAT?
VAT is a consumption tax applied to many goods and services in Europe and other countries worldwide. It is intended to tax the end consumer, not companies conducting business outside of their home country.
For your business it could may make sense to let others apply for your foreign VAT refund. This is because it can be a complex and time consuming process, which results in some companies simply not getting their own money back.
If your company is VAT registered you can, under certain conditions, get the VAT paid in EU refunded. All European countries and some other countries around the world provide the possibility for businesses to recover VAT on various expenses under the 2009/8/EC Directive or the 13th Directive or its equivalent and in some cases by local registration. Depending on the kind of expenses you have incurred, and the country concerned, you can recover the VAT your company paid.
VAT expenses your business can reclaim
The spectrum of expenses your company incurs when traveling to and visiting other countries on business is endless but a great deal of the VAT on those expenses can be reimbursed – among others:
- Access to exhibitions and tradeshows
- Transportation (domestic) including flights, taxi, train and fuel
How to apply for VAT refund
You can apply for a VAT refund yourself or let other companies do it for you. The application process is different and depends on the company is VAT registered in EU or not, or whether a VAT refund is applied from an EU Member State.
The VAT refund applications to EU countries must be made through the local tax authorities in each country – in Denmark’s case through SKAT’s “TastSelv Erhverv” – from where the application is passed on to the concerned EU country. The Deadline for the application varies between 30 June, 30 September and 31 December the year following the purchase of the product or service.
Any claim from or to a non-EU country must be sent physically and directly to the tax authority in the Member State of Refund under the EU 13th Directive or equivalent regulation. The tax authorities’ processes for verifying and refunding VAT applications according to directives differs also. Each country has its own specific filing requirements, deadlines and follow-up procedures to complete the VAT refund process according to their local regulations.
A collaboration that simplifies the process
As mentioned, it is also possible to let other do the application for your organization. In Acubiz we can help reclaim your foreign VAT. We do this via a collaboration with Cash Back, which is experts within the area. This will save you time and money.
Want to know more?
If your company has a lot of travel activity can the foreign VAT refund have a direct and often significant impact on the bottom line. However, foreign VAT is complex, and it is recommended to seek advice and guidance before applying. If you want to know more about VAT refund, read more about our collaboration with Cash Back or download our free ebook: The ultimative guide to: Foreign VAT recovery.