Value-added tax (VAT) is used most often in the European Union. It is a type of consumption tax that is placed on the added value of a product or a service whenever it is sold. Businesses recover VAT paid on their purchases (Input VAT) and pay VAT on their sales (Output VAT). The final consumer is not allowed to recover its Input VAT.
As a general rule, as a company you are allowed to claim your VAT back on all your expenses. However, some categories of products are excluded or partially excluded from this right of deduction. Each country has specific legislation and rules in place, sometimes making it difficult to know if you are allowed to claim your VAT back or not. This is one reason to start using VAT4U as we have mapped all the country specifics to make this work easier for you.