top of page

Fact about VAT

VAT (Value Added Tax) is a form of indirect tax on the consumption of goods and services. VAT is charged at each transaction on virtually all goods and services in the participating countries. The burden of VAT rests on the final consumer.

Businesses pay VAT on purchased goods and services, and collect VAT on sold goods and services. If the VAT paid exceeds the VAT collected, resulting VAT credit is reimbursed on application. Your business may qualify for VAT refunds from a wide range of business related activities in the participating countries.


Each country sets its own regulations regarding its VAT system. Therefore, VAT rates (up to 25%), refundable items and other details of VAT vary between countries. VAT may be recognized in different countries under different names such as MWST, BTW, MOMS, IVA, TVA, GST, Consumption Tax, and AFA.


VAT originated in France after World War ll, and has gradually spread throughout Europe and the rest of the world. In 1988, the 13th VAT Directive was implemented, allowing companies resided outside the European Union to reclaim VAT within the European Union. These new regulations help eliminate double taxation for businesses registered in non-EU countries.


Presently, over eighty countries have adopted the VAT system. Among them, approximately 30 countries are currently refunding VAT to non-resident companies, and the number of participating countries is growing each year:

Austria, Australia, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic , Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania , Luxembourg, Macedonia, Malta, Netherlands, Norway, Poland, Portugal, Spain, Switzerland, Sweden , Slovakia, Slovenia, South Korea, Turkey, United Kingdom.


Despite the new favorable regulations worldwide, a majority of VAT refunds are never reclaimed by non-resident companies. Your company may be among the many businesses, which are entitled to reclaim VAT, but yet have never reclaimed it.

bottom of page