EU VAT Refunds FY 2020: The 30 September Deadline is Fast Approaching

Although 2020 was a year with reduced travel activity, we have seen a steep increase in all expenses incurred to accommodate employees’ “work from home” needs.

Businesses are also continuing to incur foreign VAT on a number of costs such as:

• tooling
• imports
• spare parts
• in-warranty supplies

and many other costs that may have even significantly increased during 2020.

In the travel and entertainment arena, we are also seeing quite a few cancellation fees being charged by suppliers, sometimes with VAT and sometimes without. We can assist you in determining whether this VAT has been charged correctly, help with an EU VAT refund application and have invoices corrected if necessary.

When is the EU VAT refund deadline?

It is important to take action! Both EU established as well as non-EU established businesses should be aware of the 30 September EU VAT refund deadline to recover the VAT that they have incurred in an EU country in 2020.

Which countries does the EU VAT refund deadline apply to?

30 September 2021 is the hard deadline¹ for recovering 2020 VAT under the EU Directive 2008/9/EC (also known as the 9^th Directive and formerly known as the 8^th Directive) within the European Union.

VAT as a non-EU established business from European countries such as:

• Belgium
• Denmark
• Estonia
• Greece
• Italy
• Hungary
• Latvia
• Poland
• Portugal
• Romania
• Spain

Although Norway is not a member of the European Union, it is worth noting that the EU VAT refund deadline for foreign companies (both EU established as well as non-EU established companies) to reclaim VAT incurred in 2020 in Norway is also 30 September 2021.

EU VAT refund: eligibility

Businesses are generally eligible for an EU VAT refund for common categories of travel and entertainment expenses (hereinafter: “T&E”), in categories such as:

• hotels
• transportation
• restaurants
• car rental
• event organisation
• participation in events
• cancelled events.

That being said, every country has its own specific rules on what type of expense is eligible for VAT refund what type of expense isn’t or only partially and thus it is worthwhile to have an automated solution audit your data according to all these specific requirements.

Apart from T&E, a significant portion of the VAT recovery potential can be found in transactions that flow through the regular AP (“Accounts Payable”) process. Common examples are tooling, imports, warranty / spare parts costs, or data center equipment.

How Blue dot can help you

As a data-driven company, Blue dot is well positioned to provide insights through our AI driven solution that has already processed hundreds of millions of transactions. Even though business travel was minimised in 2020, businesses still have significant VAT recovery potential especially in countries with VAT rates of up to 27%. Blue dot’s automated audit capabilities can quantify your potential, taking into account both the country specific regulations and invoice requirements.

Good to know

Exception to the rule is the Netherlands, where it is possible to reclaim Dutch VAT up to 5 years after the year in which the VAT was charged. Specific conditions may apply.

Need help with your EU VAT refund application? Generate extra cash flow in just 5 simple steps

1. Be proactive when it comes to cash flow management. Fill out this form and we will help you determine your VAT recovery potential.
2. View your potential in our online portal, where you can have full drill-down visibility into the data processed.
3. Once you decide you want to claim the VAT, we will assist you with the setup and submit the EU VAT refund applications on your behalf.
4. We will communicate with the authorities on your behalf and escalate only those cases that require your attention.
5. Ping! You receive a notification that the EU VAT refund application has been approved and the authorities will remit the refund directly to your company’s bank account.

Who we are

Blue dot (rebranded from VATBox) offers automated and digitalised Tax platform to enhance the tax compliance and improve the visibility on your employee driven and foreign taxed spend. Concurrently, Blue dot takes into account countries’ tax regulations and company policies to ensure consistent, proper and compliant VAT determination and reporting on this specific spectrum of your spend.

Blue dot’s algorithms process data and invoice images for the purposes of VAT, GST, Taxable Employee Benefits, and non-deductible spend for Corporate Income Tax. The Blue dot platform is connected to the world’s largest expense systems for touchless data stream and data processing.

Contact us if you would like to learn more about the solutions we can offer your business.