EUROPEAN VAT RECOVERY

Companies doing business abroad incur foreing VAT on their expenses.

VAT recovery is the process of reclaiming this foreign VAT back.

Each member State of the European Union implements its own rules on what can be claimed by foreign companies.

The rules vary from a country to another. 

The main categories of expenses are :

• Hotel and accomodation
• Transportation (air / rail / road)
• Restaurants
• Telephony
• Exhibition, events and conference costs
• Marketing and promotional costs
• Diesel, petrol
• Road tolls
• Car rental
• Equipment and tooling purchases
• Certain professional fees

Since the 2010, there is a new process for EU companies to recover their foreign VAT (EU "VAT package").

This process requires to register with local tax authorities (country of origin) on an electronic portal to submit a single claim for all involved countries.

As a requirement, the non EU company's home state must have a reciprocal VAT agreement.

Some countries (as France) require a tax representative designation before granting non EU companies refunds.

A claim must be submitted on a country-by-country basis, often requiring local language and procedural understanding.