Foreign VAT Reclaim Made Easier?

Updated 8 November 2026 · Standard formula, shown below

Foreign VAT reclaim has become significantly easier for businesses in recent years due to digitalization and streamlined procedures, but it still requires careful documentation and timing. This article explains how the process works, what has changed, and how to avoid common pitfalls.

Background: The Old vs. New Process

Historically, reclaiming VAT paid in another EU country meant paper forms, postal delays, and months of waiting. The process was so burdensome that many small and medium-sized enterprises simply wrote off foreign VAT as a cost. In 2010, the EU introduced an electronic portal that replaced paper applications. Since then, most EU member states have moved to fully online submissions, and the average processing time has dropped from over a year to roughly four to six months. Non-EU countries like Switzerland and the UK have also introduced digital reclaim systems, though requirements vary.

How Foreign VAT Reclaim Works

The core principle is that VAT paid in one country can be refunded to a business established in another country, provided the goods or services were for business use. The process generally follows these steps:

Determine eligibility: Your business must be established in a country that has a reciprocal agreement with the country where the VAT was paid.
Collect invoices: You need original or electronic invoices that meet the invoicing rules of the country where the VAT was charged.
Submit the application: Use the electronic portal of your own country (for EU businesses) or the foreign tax authority’s portal (for non-EU businesses).
Wait for processing: The tax authority reviews the claim, may request additional information, and issues a refund if approved.

What Has Made It Easier?

Several changes have reduced the burden:

Digital submission: Most countries now accept online applications with scanned invoices, eliminating the need to mail paper documents.
Standardized forms: The EU uses a uniform electronic form (VAT REF 1) that is the same in all member states.
Faster processing: The EU requires member states to process claims within four months, though some take longer.
Electronic invoicing: Many countries now accept e-invoices, which can be submitted directly through the portal.
Third-party services: Specialized companies can handle the entire process for a fee, which is especially helpful for high-volume claims.

How to Choose a Reclaim Method

You have three main options: do it yourself, use a local tax advisor, or hire a specialized reclaim agency. The right choice depends on:

Volume of foreign VAT: If you only have a few invoices a year, DIY is feasible. If you have dozens, an agency saves time.
Country coverage: Some agencies specialize in certain countries and know local quirks.
Cost: Agencies typically charge a percentage of the refund (often 15-25%) or a flat fee. Compare that to the time you would spend.
Complexity: If your expenses include unusual items like fuel or accommodation, you may need expert help to ensure they are claimed correctly.

Common Problems and How to Avoid Them

Even with digitalization, claims get rejected for easily avoidable reasons:

Missing deadlines: The deadline is typically 30 September of the following year. For example, VAT paid in 2024 must be claimed by 30 September 2025.
Incomplete invoices: Invoices must show the supplier’s VAT number, your VAT number, the date, a description of the goods/services, and the VAT amount. Missing any of these can invalidate the claim.
Ineligible expenses: Many countries exclude certain items, such as entertainment, passenger cars, or fuel. Check the rules of the country where the VAT was paid.
Incorrect VAT numbers: Your VAT number must be valid and match the business name. A typo can cause rejection.
Not responding to requests: Tax authorities often ask for additional information. Ignoring these requests leads to automatic rejection.

Costs and Fees

If you use a reclaim agency, fees typically range from 15% to 25% of the refund amount, with some agencies charging a minimum fee. Some also charge per invoice or per country. DIY is free, but you must invest time. Tax advisors may charge an hourly rate. There is no official fee for submitting the application itself in most countries.

Safety and Accuracy Tips

To ensure your claim is accurate and secure:

Keep original invoices for at least 10 years, as tax authorities may audit claims retroactively.
Double-check your VAT number and the supplier’s VAT number using official EU VIES validation tools.
Use secure portals and never share your credentials with unverified third parties.
If using an agency, verify their reputation and ask for references.
Be aware that some countries require original paper invoices for certain types of expenses, even if you submitted electronically.

Alternatives to Foreign VAT Reclaim

If reclaiming is not worth the effort, consider these alternatives:

Reverse charge: For certain B2B services, you may not need to pay foreign VAT at all if you provide your supplier with your VAT number and apply the reverse charge mechanism.
Local VAT registration: If you have a fixed establishment in the foreign country, you can deduct VAT on your regular local VAT return, avoiding the separate reclaim process.
Use a local agent: A local agent can make purchases on your behalf and include the VAT in their own returns, but this adds cost.

Frequently Asked Questions

What is the deadline for foreign VAT reclaim?

For EU businesses claiming VAT from another EU country, the deadline is 30 September of the following calendar year. For non-EU businesses, the deadline is often the same, but some countries have earlier deadlines. Always check the specific country’s rules.

Can I reclaim VAT on hotel and restaurant expenses?

Yes, but with restrictions. Many countries allow reclaim of hotel accommodation VAT, but restaurant meals are often only partially deductible or not at all. For example, in some countries, only 50% of restaurant VAT is reclaimable. Check the rules of the country where the expense was incurred.

Do I need to be VAT registered to reclaim foreign VAT?

Yes, you must be a taxable person (VAT registered) in your own country. You also need to have a valid VAT number. Non-VAT-registered businesses cannot reclaim VAT.

How long does it take to get a refund?

The EU requires member states to process claims within four months, but in practice it can take up to six months or longer. Some countries are faster than others. You can check the status online in most portals.

Can I reclaim VAT on fuel for a rental car abroad?

Generally, yes, but many countries have restrictions. For example, some countries only allow reclaim if the fuel is purchased for a vehicle used for business purposes and the invoice is in the business’s name. Some countries exclude fuel entirely. Always check the specific country’s rules.

What happens if my claim is rejected?

If your claim is rejected, you will receive a notice explaining the reasons. You can usually appeal within a specified period (often 30 days). You may also correct errors and resubmit, but only if the deadline has not passed.

Method: the standard formula for this calculation, rounded as each result states. See how the calculators work or report an error.