Tax Alert: Action Required for VAT Refunds

Tax Alert: Action Required for VAT Refunds

VAT Refund Application Due by 31 December 2018

With international business travel and cross-border transactions becoming more and more common, many businesses pay VAT in countries where they are not established or VAT registered. Typical expenses that incur foreign VAT are travel expenses, conference fees, business entertainment, supplier goods, marketing services and a host of other expense that take place when doing business on foreign soil. The VAT paid on these expenses can often be reclaimed.

However, did you know that a staggering €150B in Value Added Tax (VAT) revenues were lost across the EU in 2016 alone? Just imagine how much of your company’s money is part of this €150B lost revenue.

Take action: Deadline fast approaching

Under the Thirteenth VAT Directive (86/560/EEC), US-based businesses visiting the UK are able to claim VAT refunds on VAT incurred on goods and services acquired in the UK from the period July 1st 2017 till June 30th 2018. If your company is based in the United States/Switzerland or other non-EU country, the deadline for submitting claims for VAT reimbursement on business expenses is 31st  December 2018. Note that there is no grace period to submit late claims. If the deadline date is missed, the refund opportunity is lost.

The US-based offices can claim VAT on goods and services purchased during the refund period provided in the UK on accommodation (20% VAT!), fuel, car rental, road tolls, food, drinks and restaurant services, admissions to fairs and exhibitions and some more.

Why would a business need help with VAT recovery?

Many companies find the VAT refund process complex and tedious. Manual expense management processes are fraught with errors. Keeping track of all structured and unstructured business expenses is no simple task.  Most expenses are charged on company credit cards while other expenses are paid in cash or with personal cards. In addition, not all electronic invoices are valid for VAT recovery and printed invoices often contain varied VAT rates that are not distinctly marked.

Tax authorities vary in their application of tax rates, exemptions, reverse charge mechanisms, languages, reporting requirements and deadlines. A company’s in-house finance department may not possess a clear enough understanding of the detailed and widely-varying regulations and requirements in each country.

Further, companies that do make the effort to recover their VAT are often unsuccessful. Claims are often addressed using semi-automated/manual and error-prone processes that are both time-consuming and costly. Unfortunately, if specific criteria or deadlines are not met, the refund is forfeited.

Solicit help

To ensure your business meets eligibility requirements, properly fills out all forms, and meets all relevant deadlines, oftentimes assistance is required. Take advantage of advanced, automated expense management systems like SAP Concur to streamline business travel expense processing and business expense tracking. Utilize VAT recovery systems, such as VATBox, that seamlessly access standard data and scanned invoices from your ERP, TES and other internal systems to maximize your refund.

VATBox is more meticulous and efficient than any group of VAT experts. VATBox has successfully streamlined the VAT recovery process, providing businesses and financial institutions with unrivaled visibility, compliance and data integrity. Leveraging the cloud and utilizing full automation, VATBox exhibits complete control of a company’s VAT spend, while making the recovery process more productive and yielding higher returns. VATBox easily adds-on to Concur Expense and leverages the existing data, processing it effortlessly to gain dramatically higher VAT refunds specifically for US-based companies that would like to reclaim their VAT in the UK.

Act promptly to avoid missing the annual 31 December deadline to recover VAT from the UK. Click here to learn more about how VATBox’s AI-driven solution can help your company meet this deadline and thrive in complex international markets.

Copyright © 2021 VATBox Ltd. All rights reserved. 

We appreciate your interest in VATBox!

* Mandatory Fields