If your business spends money in the European Union—hotels, conferences, local suppliers, or professional services—you have probably paid Value Added Tax (VAT) on those invoices. For many non-EU companies, a large portion of that VAT is refundable under each country’s refund scheme. The hard part is knowing what qualifies, how to document it, and when deadlines apply.
What is EU VAT?
VAT is a consumption tax applied at each stage of the supply chain. Unlike sales tax in the US, VAT is usually shown explicitly on invoices. When a non-EU business buys eligible services or goods for business use in the EU, it may recover the VAT charged—subject to local rules, minimum amounts, and filing windows.
Who is typically eligible?
- Companies registered outside the EU (or in specific cases, EU businesses reclaiming in other member states) with valid business activity.
- Expenses that are strictly for business purposes and fall into categories each country allows (often travel, accommodation, events, and certain services).
- Invoices that meet formal requirements: supplier VAT ID where required, clear VAT breakdown, and your business details.
Common pitfalls
- Assuming “we’re too small” — many refunds are left unclaimed because finance teams underestimate eligibility.
- Mixing personal and business spend without a clean audit trail in the accounting system.
- Missing country-specific deadlines; some claims must be filed within months of the tax year end.
- Relying on PDFs in email instead of structured data—automation from accounting systems reduces errors.
How SOVAT fits in
SOVAT connects to QuickBooks, scans invoices for EU VAT, applies country rules, and surfaces reclaim opportunities with clear statuses. You still approve what gets filed, but you are not manually rebuilding spreadsheets for every jurisdiction.