What is domestic VAT reclaim?
Domestic VAT reclaim is the recovery of VAT on domestic travel and expense (T&E) transactions such as hotels, accommodation, meals, entertainment etc. This is typically reclaimed monthly or quarterly and provides regular cash flow into your business.
A number of countries also allow you to reclaim backdated VAT on local business spend. In some countries, you can reclaim up to 5 years.
However, many companies do not reclaim domestic VAT because of the complicated nature of the reclaim process, paired with the high risk of getting it wrong.
60% of companies submit VAT returns that are non-compliant
Taxback International have conducted internal research that found many companies are not making full or correct Domestic VAT submissions to their local tax office.
Significant revenue is being lost because companies are incorrectly reclaiming domestic VAT or not including all eligible receipts.
When we examined the reasons for this, and four consistent issues emerged:
- Domestic VAT was deducted but not valid, therefore non-compliant with Tax Office laws
- Domestic VAT was incorrectly deducted and ineligible, resulting in companies reclaiming a high amount of ineligible VAT
- Domestic VAT that was eligible, was not deducted resulting in a loss in the reclaim for the company
- Many smaller expenses were missed as they were regarded as too difficult to reclaim on or the company didn’t have enough resources to manage the amounts of these small transaction
In total we found over 60% of companies were submitting domestic VAT returns that were non-compliant, and therefore they were risking fines from the Tax Office and indeed Tax Audits.
What are the benefits of working with Taxback International?
Taxback International has 20+ years’ experience dealing with all global tax jurisdictions. We understand all of the local VAT practices in over 180 countries to guarantee full compliance with tax legislation.
We integrate with all Expense Management Systems meaning there is no IT implementation needed. We do all of the analysis, preparation and provide your domestic VAT report in the style required by your local tax office for inclusion in your local domestic VAT return.
Our fully managed process for identifying and reporting compliant VAT amounts makes it easy and quick for your business to deduct the correct amounts of VAT in your domestic VAT returns.
Get started with Taxback International
Taxback International can provide you with a free analysis, which will highlight where we identify missed Domestic VAT opportunities within your VAT process. This analysis is free, and requires no commitment from you.
Should you decide to proceed to work with us, there is minimal effort from you. Find out more.