Pay foreign hotels in the right way – have VAT refunded automatically.

Pay foreign hotels in the right way – have VAT refunded automatically.

VAT which is paid by companies abroad is money which actually belongs to the paying company. However, getting VAT money refunded can be so complicated that many companies don’t bother. There is now a fully automated way to simply get back all the VAT which involves hotel stays abroad. Which can entail 10% of the total cost!

In Europe alone, it is estimated that companies neglect to claim back more than €150 billion in VAT each year. A large part of this involves costs for hotels, where VAT can be from 7 – 20%.

Even though the company utilises a service for VAT refunding, it can be difficult to reclaim money for hotel costs as the invoices often do not contain the information which is needed. Even though they might have all the information that is required for accounting and payment of travel expenses, specific details might be missing which are specifically required by VAT agencies.

The problem lies in the fact that all information must be included at the actual time of payment. Special travel expense systems or photographed receipts are therefore not alternatives for VAT refunds as the payment has then already taken place according to what is called ”Level 1” (you can see the difference between the different levels in the illustration below.)

The solution is to use a travel agent which pays the hotel with a so-called ”Level 3” solution.
In such a solution, the hotel receives its payment at the same time as all necessary information for automated VAT repayment is documented electronically.

Level 1
An ordinary card purchase with limited information for the card holder about the transaction.

Level 2
As Level 1 but with two additional fields: VAT and customer code. Special hardware and software is required to retrieve this data.

Level 3
Detailed field information for B2B customers. Requires advanced, special payment technology, delivers the best transaction conditions.

A file is received once a month by the company’s accounts system with all transactions and all their details. It also means that travellers do not need to save receipts as all information needed goes directly into the accounts. The VAT that the company has paid abroad is refunded to the company one or several times a year. At the same time, it is also possible to rapidly and simply produce statistics and cost data for, for example, customer invoices.

Enter all the company’s travel in your Travel Account

The Travel Account doesn’t only enable you to claim back VAT on foreign hotel stays. It can also save a lot of time and money in administration – both for the individual traveller and for the employer. The more travel that is paid through the Travel Account the greater the saving, as all loose receipts and all administration of travel expenses disappear.

However, it is also possible to enter costs in the company’s Travel Account which do not come from the travel agent.  The Swedish company Travel Clearing has a service which allows the company to collect almost all its travel expenses in the Travel Account. Train travel, rental cars, taxis and even local traffic and airport buses.

Just as in the case of hotels, all necessary information is included completely automatically and no receipts are required.

Would you like further information about what Travel Clearing and Travel Account can mean for your company?
Complete the form here

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