How to Claim VAT: Essential Steps for Businesses

October 12, 2023

It’s so easy to scroll past the majority of content on the internet and think very little of it, especially regarding the world of VAT reclaim. But here’s the thing, just because it’s challenging to navigate doesn’t mean it isn’t relevant or applicable. Better yet, you don’t have to be a VAT or compliance guru to reap the benefits of significant cash flow and revenue pumped back into your business.

However, what you do need is a place to start. Allow this to be that space – your go-to guide to finally figuring out how to claim VAT and securing those refunds in the bag.

Step one: Confirm the different types of reclaim processes you’re dealing with

Right, so broadly speaking, a business mostly deals with two types of VAT recovery processes: local and international recovery. At VAT IT, we refer to these as our domestic and foreign solutions. In brief, the difference between the two revolves around where a specific expense occurred. If you’re claiming VAT from a country where you are VAT-registered, your claims will fall into the domestic type category. However, what about international business expenses? They’re recoverable, right? Exactly! If you’re a foreign business, you can claim VAT from multiple countries without necessarily needing to be VAT registered or make sales in the country. If that is the case, the specific country may have foreign VAT recovery schemes in place.

Step two: Crank up the spend visibility

The golden rule of VAT reclaim is: If you want to recover it, you have to be able to see it first. In order to maximize your VAT potential, it’s imperative that all transactions and expenses are visible from a leadership point of view. However, this is often easier said than done. Some of the most significant (and common) VAT-recoverable expenses are found in the most unlikely places. Be sure to drive transparency and collaboration between departments regarding VAT recovery treatment and processes. That means holding onto those invoices and aligning internal processes with the relevant recordkeeping requirements and invoicing instructions.

Step three: Keep tabs on due dates

Buckle in folks, you may be in for some admin. As a business scales, so does its VAT potential. The success of your recovery submissions, however, greatly depends on your ability to comply with all the relevant due dates. When claiming VAT, it’s essential that your returns and claims be filed with the tax authorities on time. It gets tricky, though, as the submission process and timelines heavily depend on the specific country you’re recovering from.

Fortunately, you don’t have to keep your fingers crossed that you’re in the clear. Rather, cross your t’s and dot your i’s, knowing you’re (re)covered with experts in your corner. At VAT IT, we help you reduce the administrative burden, streamline the recovery process, and help you maximize your VAT potential on auto-pilot.

Explore your refund possibilities with VAT IT.


You may also like

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}