As a business based in the United States, you’re probably well aware of the concept of sales tax. However, what happens when your business expands beyond just the 52 states?
Can you reclaim the sales tax incurred on business expenses made overseas? Most U.S.-based companies are unaware that they are entitled to a refund of taxes incurred abroad, missing out on many savings that are lost forever.
The first order of business? Let’s switch up the lingo.
Value-added tax (VAT) is a type of consumption tax that is levied on both goods and services in most international countries. This is also commonly referred to as goods and services tax (GST) in some countries. VAT rates and processes are all subject to country-specific rules and regulations. However, one common trait remains; a non-resident business may be eligible for VAT recovery on various business expenses incurred on business trips to foreign countries. In some countries, the VAT charged on goods and services can be up to 25%, providing a significant savings opportunity for businesses that travel abroad for once-off events or frequently incur expenses in a country outside of the United States – granted that they meet specific eligibility requirements.
Before we dive into the VAT reclaim opportunity for U.S.-based companies, you may wonder why many businesses aren’t actively reclaiming the VAT incurred on international business expenses. What could trump the chance to recover up to 25% of global spending? Well, here’s the deal. VAT administration is complex, especially when dealing with VAT systems from abroad, generally in a foreign language.
These administrative practices, rates, deadlines, and documentation requirements are all country-specific. On top of that, it is very easy for businesses to over or underclaim eligible expenses depending on the nature of business activities and local legislation. Apart from the external complexities hindering the process, a significant contributing factor is that many U.S.-based companies are unaware of their reclaim potential or lack sufficient knowledge or resources to comply with the reclaim procedure successfully.
Fortunately, we’re specifically designed to deal with all your VAT needs, so you don’t have to worry about the nitty-gritty. Here’s how your U.S.-based business can benefit from our foreign VAT solution.
Our foreign VAT reclaim solution is tailored to businesses that effortlessly want to recover the VAT incurred on international expenses worldwide. Suppose your U.S.-based company frequently incurs costs abroad. In that case, you may be eligible for a refund of the VAT incurred on business travel, general expenses, imports, and other niche industry-specific expenses.
Our VAT IT team has a vast network of close relationships with local tax authorities, ensuring your business can benefit from claim-only VAT schemes while optimizing your administrative load, maximizing your VAT yield, and ensuring 100% compliance with local VAT regulations.
Curious about what we can do for your specific industry? We’ve got you covered. Check out our industry-specific reclaim opportunities. Alternatively, jump right in and discover your VAT potential right away with our VAT potential calculator.
When You Need an Intra-Community VAT Number and How to Get One If your business buys or sells goods and services across EU borders, intra-community VAT is something you will need to understand. It is not the same as domestic VAT, and the rules around registration, invoicing, and reporting work differently from what most businesses […]
5 Top AI-Powered Tax Compliance Tools Tax compliance software has come a long way and what used to mean basic automation now includes machine learning, smarter data processing and tools that can spot problems before they become expensive. The category has a new name: AI-powered tax compliance. For finance and tax teams managing tax […]
SAF-T Reporting Explained: What Businesses Need to Submit for VAT Compliance Tax authorities across Europe are moving away from manual, sample-based audits. In their place, a growing number of jurisdictions now require businesses to submit structured accounting and VAT data in a standardised format that can be checked automatically, at scale, and in far greater […]
The DGFiP Has Spoken: France’s September e-Invoicing Deadline Stands. There has been speculation in recent weeks about whether France’s mandatory e-Invoicing deadline would be pushed back following a cyberattack on the DGFiP, France’s Public Finances Directorate. The French government has now responded directly, and the answer is unambiguous: no postponement. David Amiel, Minister for […]
How to Deregister for VAT and What to Consider First A drop in turnover, a change of business model, or the closure of a cross-border sales channel can all result in a company being registered for a tax it no longer needs to charge. Cancelling that registration is rarely as simple as writing to the […]
EDI vs E-Invoicing: What’s the Difference and Which Does Your Business Need? Both EDI and e-Invoicing move structured transactional data electronically between businesses. On the surface they look similar. In practice they serve different purposes, operate through different mechanisms, and carry very different compliance implications depending on where your business operates. Understanding the distinction is […]
This webinar explains how US businesses can identify and recover foreign VAT, breaking down key concepts like reciprocity and showing where refund opportunities are often missed.
