The 5 Most Common VAT Mistakes

If your organisation operates in multiple jurisdictions, it is critical to maintain full visibility and control. We investigate the most common mistakes organizations make in relation to VAT.

 5 Top VAT Mistakes

VAT Reclaim is a complex environment due to ever-changing rules and legislation. If your organisation operates in multiple jurisdictions, it is critical to maintain full visibility and control. This can become a difficult task when dealing with multiple tax offices across numerous continents.

Taxback International take a look at some of the most common mistakes companies make when trying to manage VAT in house, or by using a sub-standard VAT provider.

Mistake #1 - Applying the wrong VAT rate.

People often make the assumption that their supplier charges the correct VAT rate - but this is not always the case. There is huge potential for mistakes made when calculating the reclaimable VAT if you do not have good local VAT knowledge in the country of refund. Companies should be aware that penalties can be applied by tax authorities for incorrect applications whereby more VAT is claimed than is refundable.

Mistake #2 - Deducting the incorrect percentage of VAT charged.

In some countries only a portion of the VAT charged is refundable, for example, 35% of the VAT charged on car rental in Belgium. Without this local knowledge, incorrect amounts of VAT can be applied for. Companies should be aware that this can result in penalties being charged by the tax authorities for incorrect applications claiming more VAT than they are entitled to.

Mistake #3 - Failing to keep VAT receipts for fuel.

To recover VAT on fuel costs abroad, your business must provide the correct VAT receipts for your fuel purchases. Without them, the substantial VAT reclaim potential on these expenses is gone.

Mistake #4 - Failing to keep originals.

Non-EU based organizations submitting a claim to a tax authority within the European Union must keep all original receipts and invoices. It is becoming common practice for companies to throw away the originals and only keep scanned copies. In this case, you will not be able to reclaim your eligible refunds. 

Mistake #5 - Working with partners without true expertise.

Not all VAT providers are created equal. With the many complexities and nuances to VAT recovery, below standard VAT providers will lead to missed VAT reclaim opportunities or incorrect applications resulting in rejections and/or penalties. Often, companies are simply unable to keep up with the VAT legislation or procedures internally.

How to avoid VAT mistakes?

Taxback International is a global leader in local and foreign automated VAT reclaim. Our proprietary software automates the VAT reclaim process by extracting data quickly and accurately and automatically processing the data for submission to the tax authorities.

By combining our global expertise with our automated VAT reclaim process we can radically reduce the time taken to submit claims and for you to receive reimbursement.

Talk to VAT Experts now!


Our team of experts ensure that everything reclaimed is fully compliant.

Need more information about global VAT reclaim? Get in contact with our team today!

We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult.  Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories and everything that you need to know, from breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.



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