Get Your VAT Money Back

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Companies globally are missing out on USD20 billion of reclaimable value-added tax (VAT), also known as goods and services tax (GST). Yes – 20 billion US dollars. This money belongs to companies, so why would they forfeit refunds that tax authorities owe them? 

VAT applies to the purchase of various goods and services and is generally included in the final price paid by the business or consumer. VAT is recoverable in more than 180 countries around the world. Each country has different rules and approaches, making compliance and reclaiming a complex process. 

Different VAT rates are applied by the countries and for different types of goods, but overall, the average VAT rate is about 15%. For example, the rate in Singapore is 7%, while the lowest VAT rate in Europe is 17% in Luxembourg. The numbers add up -- think of all the savings you would get if you reclaim the VAT owed to you. It is a mistake for companies to see some refunds as not high enough to chase. 

 

Here are a few things to consider:

  • Proper record-keeping is essential as data is only good if it's accurate. The more complete and readable the records, the easier it is to submit VAT claims and manage the process. 
  • Digitization and automation can ease companies’ workflows, reduce the chances of making mistakes, spare them the grief (and fines!) that can ensure an audit. 
  • Start with improving record-keeping by adopting expense management and accounts payable automation solutions. 
  • Ensure that your company has best practices and processes in place and employees know what they need to provide before submitting claims.
  • Make sure your employees know the necessary steps needed to submit documents successfully for VAT refunds. 

 

The world of VAT compliance is not the easiest to navigate as it’s often filled with little details, snags and pitfalls. As an entrepreneur or a senior executive growing a business, it is often not feasible to spend your days learning every nuance of claiming VAT. It is often the case that with reclaim and compliance, minor errors can come back to bite your company hard. From the tax authorities' perspective, it won’t make a difference if discrepancies or anomalies in your VAT return are due to a slip of the finger – such as when you type a nine instead of zero – or if it is a deliberate and fraudulent expense entry. 

Small streams make big rivers. Don’t let a few percent here and a few percent there of missed VAT refunds add up. It’s a cost to companies. 

Download Jenji’s latest VAT guide book for more on how you can take control of your VAT. 

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