If you are a vat registered trader in a eu country that follows the system of VAT or value added tax then you should claim vat amounts spent on business purposes since claiming vat expenses can certainly reduce your business costs. For example, if your business is located in the UK then there are several expenses that can be claimed back provided you meet the criteria set by HM Revenue and Customs or hmrc.
The hmrc vat department has laid down specific rules on vat reclaim on certain expenses related to your business. For example you cannot claim expenses made on entertainment of customers or suppliers although you can claim back expenses made on employees. If there are business contacts as well as employees that have been entertained together then you can claim back expenses related only to employees. If you give away business gifts then you can normally claim those expenses back in vat. In addition, in case you do not give more than £50 worth of business gifts to a single person in 12 months then you need not account for vat too. You need not account for vat on any free samples give by you to anyone.
Again, if you plan to reward your hardworking employees by throwing a staff party then such vat expenses can also be legally claimed back since they are considered for business purposes. Although these vat rules apply to businesses in the UK, other eu countries too have their own rules regarding claiming of expenses. Most eu countries however do allow refunds on expenses related to car rentals, food, hotel accommodations, training, or any other type of professional fees given in the same country or even in a foreign country that follows vat. Similarly, if your employees attend trade shows, exhibitions or conferences in any foreign eu country that follows vat then again, you are entitled to apply for a vat reclaim by providing all necessary proof to the vat department in your country. The documents are then sent electronically to the country of origin and the entire process of vat refunds usually takes between 4 to 8 months.
However, if you have indulged in business expenses in your own country or in another country then you should try to recover those vat expenses back. You should contact expert vat agents that usually take their fees as a percentage of those vat refunds and that too only when the amount is recovered back. This will put you in a win-win situation while lowering your business costs when you successfully reclaim each expense that is connected to your business. You will normally have around 6 months in the next calendar year to make a claim for vat refund for expenses incurred in the previous year. The European Commission has issued a directive that explains all about the expenses that can be claimed by member eu countries that follow vat, although it is better to check on vat rules applicable in your own country too.
If you are a vat registered trader in any eu country following the system of vat tax then certain business expenses can certainly be claimed back. Your vat agent can help you to identify such vat expenses and follow the proper procedure to file for reclaiming vat paid earlier so as to reduce your business expenses to a large extent.