Did you know that every year, over €20 billion in VAT goes unclaimed? That’s billions of euros that businesses and entrepreneurs could be reclaiming — and chances are, some of that money could be yours.
If you’ve been spending on business-related travel, events, or services abroad, you might be sitting on a significant VAT refund that you didn’t even know you could claim. The reality is that many businesses are unaware of the opportunity to reclaim VAT on expenses incurred in foreign countries, leaving money on the table.
In this article, we’ll explore how foreign VAT works, why so many businesses miss out on these refunds, and how you can reclaim what’s rightfully yours — quickly and easily.
What is Foreign VAT, and Why Does It Matter to Your Business?
Foreign VAT is a Value Added Tax that you pay when you incur expenses in another country. It could be the VAT on flights, hotel stays, business meals, conference fees, transportation, or any other business-related purchases made while you’re abroad.
For businesses that operate internationally or send employees on business trips, these costs can add up quickly. The good news? Many countries allow businesses to reclaim VAT paid on such expenses. This means you could be entitled to a refund on the VAT you’ve already spent — money that could benefit your cash flow and improve your bottom line.
However, the sad truth is that most businesses either aren’t aware they can reclaim this VAT or they don’t know how to go about it. This leads to an alarming amount of unclaimed VAT every year, which means businesses are effectively overpaying and missing out on significant financial opportunities.
Why Over €20 Billion in VAT Goes Unclaimed Every Year
It’s difficult to fathom that more than €20 billion in VAT goes unclaimed annually across Europe, but the reasons for this are varied and complex. Let’s break down the main causes:
- Lack of Awareness
Many businesses, especially small and medium-sized enterprises (SMEs), simply don’t know that they can reclaim VAT on their foreign expenses. They assume that VAT refunds are only available for larger companies with extensive accounting departments or for those that are VAT-registered in the country where the VAT was incurred.
- Complexity of the Process
Reclaiming foreign VAT isn’t always straightforward. Different countries have different VAT rules and regulations, and the paperwork can be complicated. For businesses unfamiliar with international tax laws, the process can feel overwhelming, leading them to give up or avoid claiming altogether.
- Missing Documentation
The VAT refund process requires you to submit detailed documentation, such as receipts, invoices, and proof of payment. Incomplete or incorrect paperwork can lead to delays or rejections of claims, which deters many businesses from even attempting to reclaim VAT.
- Long Processing Times
VAT claims can take several months to process, and the wait time often discourages businesses from pursuing refunds. Many companies are reluctant to go through the effort if they think it’s going to take too long to see any returns.
Despite these barriers, there’s good news: With the right approach and support, reclaiming foreign VAT is easier than you might think.
How You Can Reclaim Foreign VAT and Get Your Money Back
If you’ve been spending on business-related activities abroad, you may already be eligible for a VAT refund. Here’s a step-by-step guide on how to get started:
- Identify Your Eligible Expenses
The first step in reclaiming foreign VAT is to identify which expenses qualify for a refund. These typically include:
- Travel Expenses: Flights, taxis, trains, car rentals, and other travel-related costs.
- Accommodation: Hotels, Airbnb, or any other lodging used for business purposes.
- Meals and Entertainment: Business meals, drinks, and events directly related to business activities.
- Professional Services: Fees paid for consulting, legal services, or other business-related services abroad.
- Gather Your Documentation
To submit a VAT claim, you’ll need to have complete documentation. This includes original invoices or receipts that show the VAT amount paid. It’s important to ensure these receipts are clear, legible, and correctly formatted, as missing or incorrect information could delay the process.
- Work With VAT Experts
Navigating foreign VAT rules and regulations can be complicated, especially if you’re not familiar with the tax systems of other countries. That’s where VAT experts come in.
By partnering with a VAT reclaim service, you can save yourself the time and hassle of figuring out the paperwork and legalities. Professionals will ensure that your claim is correctly submitted and that you’re eligible for the maximum refund.
- Submit Your Claim and Get Your Refund
Once your claim is submitted, the VAT authorities will process your refund. Depending on the country, this can take anywhere from 1 to 6 months, but with expert assistance, you can ensure the process goes smoothly and efficiently.
The best part? You’ll receive your VAT refund directly into your account, boosting your business’s cash flow and helping to offset your business expenses.
Why You Shouldn’t Wait: Time is Money
As you can see, reclaiming foreign VAT is a smart financial move for businesses of all sizes. Don’t let the €20 billion in unclaimed VAT discourage you — you can take action today to ensure your business isn’t missing out on its rightful refund.
The longer you wait, the more money you could be leaving on the table. Remember, VAT refunds are not limited to large corporations. Small businesses and entrepreneurs who spend money abroad can also claim VAT refunds — it’s all about knowing the rules and having the right partner to guide you through the process.
Get Help Today and Reclaim What’s Yours
At VATcube, we specialize in helping businesses like yours reclaim foreign VAT quickly and efficiently. Our team of VAT experts understands the complexities of international tax laws and will ensure that your refund is processed seamlessly.
To determine your potential VAT refund and learn how VATcube can help your business, take advantage of our free VAT assessment. Simply contact us through our FREE VAT Assessment form and our team will be happy to assist you.
By understanding the intricacies of EU VAT refunds and leveraging the expertise of VATcube, businesses can effectively recover their eligible VAT, optimizing cash flow and enhancing their financial performance.
Contact us today to start reclaiming your foreign VAT and unlock your business potential.