VAT Recovery – The Why and How
Small and medium-sized businesses often don’t understand VAT recovery. Although business owners are aware that they have the potential to recover some of their foreign and local VAT, they don’t have the financial resources necessary. There is no limit on the amount of VAT that can be recovered. Even small expenses like VAT for a cup coffee add up. This method can typically be used to recover about 4% of a company’s total travel expenses.
It is true that VAT recovery can be complex and the rules vary from one country to another. Add in foreign languages and the fear that a tax authority might make a mistake, and it is easy to see why small businesses would prefer to write off VAT as an expense than to allocate resources to recover their funds.
Simpler VAT Recovery
WAY2VAT to Zoho Expense automates almost all aspects of VAT recovery, allowing you to reclaim VAT and protecting you from trying reclaim for ineligible purchases.
Once you have scanned your tax receipt, the system will automatically reconcile your invoice with expenses and sort local and international expenses.
- The platform scans tax invoices stored in your system for local VAT. If the incorrect documentation is found, the platform will either get the correct documentation from the vendor, or alert you to obtain it from the vendor. It then prepares your monthly VAT reports, which you can submit to your local tax authority.
- The process for foreign VAT is the same. Instead of requiring you to submit forms, however, WAY2VAT sends your tax forms directly the foreign tax authority.
The funds are transferred directly from the tax authority to your account.