Five Easy Steps to Improve your VAT Management
Are you sure your business is taking advantage of all possible VAT reclaim opportunities available to you? Missing out on the opportunity to improve your VAT management impedes the growth of your business and makes it less cost-effective. There are ways to reduce your tax burden and avoid losing funds. This can result in having more efficient financial strategies that may help your company remain competitive. Here are five easy steps to optimize your VAT returns with improved VAT management.
#1. Educate Your Staff to Save on Business Travel
Dozens of countries worldwide, including the European Union, permit VAT reclaims on business travel expenses. Surprisingly, many traveling employees of a business overlook this opportunity. This hurts a business’s bottom line by leaving money on the table. The VAT on these expenses can be up to 20-25%, so it is important tat all traveling employees understand the rules and regulations behind VAT reclaim, especially as it pertains to their business travel. Business travel expenses include:
- Accommodation and meals
- Transportation and fuel
- Internet and phone services
In order to optimize your VAT management, it is critical to make sure your employees understand what documents must be submitted to reclaim VAT on their expenses. Your business traveling employees should be aware of the difference between an original invoice and a pro forma invoices. They must also understand the difference between credit card slips and other proofs of payment. Ensure that the invoices your business traveling employees they submit have all the necessary information to allow your company to reclaim all of the VAT it is due. For instance, hotel invoices must list its VAT number and your company’s name and address. The hotel cannot list just the employee’s name. For more information about these types of expenses, read our guide that includes guidelines to help employees who travel for business submit proper invoices for their travel and entertainment expenses here.
#2. Reclaim VAT on Employee Training
It is beneficial to nvest in your staff in order to improve your company’s VAT management from the very beginning. You may be surprised to learn that 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! Your company also benefits from the added benefit of reclaiming all VAT due. However, the legislation guiding employee training is rather complicated, and it requires expert knowledge to reduce your tax burden in this area. Be sure you understand all of the rules and regulations regarding claiming VAT on employee training by consulting a professional.
#3. Expert Fees
Has your company hired lawyers or other local professionals to support your international operations? The 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
Is your business considering sending a few employees to participate 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 for your company’s business partners. Refundable expenses cover client entertainment, conference fees, marketing and advertising, as well as travel expenses mentioned in the sections above. Thoughtful VAT management helps you provide better services to your clients while keeping it cost-effective.
#5. Automate Your VAT Management
The rules and regulations regarding business VA refunds are extremely complex and vary greatly across countries. In addition, there are often changes to the legislation which adds complexity to filing your ocmpany’s business VAT return. These numerous changes in legislation are not easy to track and implement into your company’s business processes. Automated solutions can help to streamline your company’s VAT management and make the recovery process more productive. This can help your company to reclaim all the VAT due and have higher returns. Automated solutions also help your company stay on top of the constantly changing and varying regulations. VATBox is a financial technology company that offers not only unrivaled visibility but also 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.
Implementing all of the suggestions in this short article may seem simple, but in fact they can be quite complicated. It is beneficial to have VATBox help make this process easy for your company by handling the complexities for you. This leaves more time for your company to do what it does best, provide outstanding services to your loyal customers. Learn about all the benefits VATBox’s automated solutions can provide to your business.