This is how the VAT which applies to meals taken at the hotel (including breakfasts) can be deducted. For this, it is important that the rate and the amount are clearly mentioned on the invoice. Even if this is only a small amount compared to the cost of the night, over a year of travel, missing out on this deduction would be detrimental to your finances.
It is also important to note that the VAT recovery rules apply exclusively to expenses reimbursed in reality. If you give your employees a flat rate for their mission expenses, it will not be possible to request recovery, even on expenses that would have been eligible with actual reimbursement. Here, therefore, the rules on travel will apply. The use of the tax return calculator comes quite useful there.
All expenses related to travel and passenger transport cannot be eligible for the right to deduct VAT. Train, metro, bus, taxi, plane, boat, bus, the amount to be paid is global and no VAT can be recovered. But here, too, there are important details to know.
- If the travel costs are the responsibility of a supplier and re-invoiced to the company as part of a service contract, VAT becomes deductible. This is particularly the case for consulting assignments, where the consultant’s travel expenses are invoiced in parallel with the main assignment.
- Regarding the rental of vehicles, the VAT recovery depends on the use. Indeed, it is forbidden to recover the VAT for a passenger car, even if it is rented for a professional mission, but it is on the other hand possible to recover that on the rental of commercial vehicles. Regarding fuel, it’s the same principle. There are particularities depending on the type of fuel and the type of vehicle.
- Finally, it should be noted that the mileage allowances which are reimbursed to employees when they use their personal vehicle for professional use are not subject to VAT.
Managing VAT on expense reports is a daily challenge for businesses. To facilitate this work, most professional expense management platforms include these specificities natively. The risk of error is therefore greatly reduced and this practice also helps to facilitate the management and validation of expense reports.
- The recovery of VAT can be a hidden treasure for your business. In particular for the expenses and professional expenses incurred by the employees during the exercise of their function.
In this article you will find 3 preconceived ideas on recoverable VAT, we will see together which are true so that you can get your money back. Find your money back with this tutorial on VAT recovery.