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Three easy steps to claim Vat on international expenses

by , 01 July 2013
Do you or your employees travel overseas for your Vat registered business? If so you should claim back the Vat charged in those countries. Follow these three steps to claim back foreign Vat.

If you or your staff members travel overseas for your Vat-registered business, some countries let you claim refunds on the Vat you've paid.

According to the Practical Vat Loose Leaf Service, the first step to claiming back international Vat is to check if the country you've travelled to offers a Vat refund, then see if your expense qualifies for a refund and attach all the necessary documents.

Here are the three steps you need to follow.

Claim international Vat using these three steps

Step #1: Check that the country you travel to refunds Vat

You can claim Vat refunds from these countries: Austria, Australia, Belgium, Denmark, Finland, France, Ireland, Japan, Luxembourg, Netherlands, Norway, Poland, South Korea, Sweden and the United Kingdom.

Step #2: Know the expenses that qualify for a Vat refund

  • Car rental;
  • Taxi fare;
  • Public transportation (train, aeroplane and bus fares);
  • Conference costs;
  • Seminar fees;
  • Exhibition stand costs and stand hire;
  • Trade fair expenses;
  • Training course fees;
  • Hotel accommodation;
  • Tickets and entrance fees;
  • Fuel (petrol and diesel);
  • Legal fees (for example, for contracts, trademark or patent registrations); and
  • Meals and refreshment.

Apply to the tax authorities of the country within six months of the end of the calendar year you travelled. You don't have to submit a claim for each trip. Hand them in when your claim in that country exceeds the minimum amount refunded. This is usually about R3 000.

Step 3: Attach all the necessary documents to your refund application

Each country needs you to submit specific documents with your Vat claim. Remember to attach the following documents to your application:

  • All the original tax invoices.
  • A certificate of status proving you are a Vat-registered vendor in South Africa.

The refund can take up to nine months to be paid. It'll be made electronically or by bank draft in the currency of the country you visited.

Since it's complicated to apply for your own refund especially if you don't speak the language, you can hire a Vat refund agent to do the work for you.

Just keep in mind that they take commission only on the amount recovered and don't charge an upfront fee. This means if you don't get a refund, you don't have to pay them.

If you need more assistance, you can log on to the VATit website for more information on how to claim your Vat refund www.vatit.com.

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