5 Easy Steps to Improve your VAT Management
Are you sure your business is taking advantage of all possible VAT reclaim opportunities? Missing out on the opportunity to improve your VAT management impedes your business growth and makes it less cost-effective. There are ways to reduce your tax burden and avoid losing funds, resulting in more efficient financial strategies that help your company remain competitive. Here are 5 easy steps to optimize your VAT returns.
#1. Educate Your Staff to Save on Business Travel
Dozens of countries worldwide (EU included) permit VAT reclaims on business travel expenses. Surprisingly, many business travelers overlook this opportunity leaving money on the table, while VAT on these expenses can be up to 20-25%. Business travel expenses include:
- Accommodation and meals
- Transportation and fuel
- Internet and phone services
Make sure your employees understand what documents must be submitted to reclaim VAT on their expenses. They should be aware of the difference between original invoices and pro forma invoices, credit card slips and other proofs of payment. Ensure that the invoices they submit have all the necessary information. For instance, hotel invoices must list its VAT number and your company’s name and address, not the employee’s name. Read our guide with guidelines to help employees who travel for business submit proper invoices for their T&E expenses here.
#2. Reclaim VAT on Employee Training
Invest in your staff and improve your VAT management from the beginning. VAT-registered businesses can claim back VAT on employee training. That said, organizing a seminar to teach your staff how to save on business travel (see above) might cost you less than you expect! However, the legislation guiding employee training is rather complicated, and it requires expert knowledge to reduce your tax burden in this area.
#3. Expert Fees
Has your company hired lawyers or other local professionals to support your international operations? Fees charged by these experts usually include recoverable VAT. This applies to both on-going activity and one-time expenses. Usually, the general requirement is that expert costs relate directly to your taxable business.
#4. Business Events
Are you considering participating in a conference or a trade show abroad? You can reclaim VAT for these activities. The same applies to promotional events you organize for your company’s employees or your business partners. Refundable expenses cover client entertainment, conference fees, marketing and advertising, as well as travel expenses mentioned above. Thoughtful VAT management helps you provide better services to your clients while keeping it cost-effective.
#5. Automate Your VAT Management
VAT refund rules are extremely complex and vary greatly across countries. Numerous changes in legislation are not easy to track and implement into your company’s business processes. Automated solutions streamline your VAT management, making the recovery process more productive and ensuring higher returns. They also help your company stay on top of the constantly changing and varying regulations. VATBox is a financial technology company that offers unrivaled visibility and full automation of your VAT processes, with the goal of bringing ease to the process and bringing you peace of mind. Get an insider’s look.