Many businesses still handle their VAT reclaim process manually, literally sorting through receipts to see which ones they consider worth processing. These wasted man hours, and all the VAT left unclaimed, can add up to a serious loss. If you’re looking for better VAT solutions, we’re here to help. Read on for answers to a few of the questions we hear the most often.
Q: What are the biggest misconceptions about VAT reclaim?
Perhaps the biggest misconception is that it’s not worth the effort. When you look at an individual invoice, the amount of VAT may seem insignificant to your company’s bottom line, but all of those small sums can add up throughout the year.
The other misconception we hear a lot is the belief that a credit card slip is sufficient. Many employees believe that if they didn’t receive an invoice, they can just use the credit card receipt. It’s important to know that you may have to explicitly ask for a VAT invoice.
Q: How can I improve my business’s VAT reclaim process?
There are three steps you can take to improve your process.
- Invest in software that can process your claims for you, freeing up your Finance Department to work on other things.
- Ensure you understand the rules and regulations around VAT. A little time spent in research can help you reclaim a significant amount of money.
- Develop a comprehensive policy on what employees can and cannot submit for reimbursement, and make sure everyone is trained in it. Create a packet that they can review before any EU business travel.
Q: How can I be sure I have an actual VAT invoice?
A VAT invoice will have the local word for invoice on it (for instance, “Rechnung” in German or “Fattura” in Italian). Train yourself to look for and identify the correct word for invoice in the local language of any country you’ll be doing business in.
Additionally, an invoice should include the full legal name and address of your company (not the employee making the purchase), the ID number of the supplier, and of course, the amount of VAT paid. If your employees are not sure if they have a proper original invoice, they should not be afraid to ask the supplier to go over it with them.
Q: Do I need a full invoice for everything?
Countries typically apply a threshold below which no full invoice has to be issued. In the EU the threshold ranges between 100 EUR – 400 EUR per country. But also for specific expense categories a simplified invoice / receipt might be sufficient for VAT recovery, which generally include taxi and train and other means of public transport.
Q: Is this really worth all the hassle?
Absolutely! If you do a significant amount of business in the EU, you are wasting money if you don’t have a VAT reclaim process. It’s worth taking the time to understand the regulations and put a system in place to ensure that you receive any VAT reimbursements you’re entitled to, and don’t waste your time pursuing VAT for which you don’t have the right documentation.
Founded in 2012, VATBox has been revolutionizing the automated VAT recovery marketplace with its cloud-based solution that can be deployed in 30 minutes without any additional budget or IT resources. VATBox’s out-of-the-box solution handles reports, data collection, aggregation, qualification, submissions and the complexities that accompany these processes using a fully automated approach. VATBox implements the highest level of data security and compliance with all international rules and regulations of the various jurisdictions, and offers companies 360⁰ visibility into their VAT spend and recovery. Let us show you how your company can thrive in today’s complex financial times. Request a free demo here.