It has been estimated that around one fifth of businesses are losing out on huge sums of money in unclaimed VAT due to a complex and time-consuming European rebate system.
According to the report, as much as $20 billion (almost £15 billion) in cross-border VAT could be lying unrecovered in more than 30 countries worldwide. This is mainly because each country has different regulations and deadlines, and businesses can often face language barriers.
Meanwhile, a separate study from the Organisation for Economic Cooperation and Development (OECD) has revealed that more than 20 per cent of businesses are unable to recover any of the foreign VAT they incur on business expenditure, mainly because of the policies of the foreign tax authorities involved.
At the same time as having to face these complex procedures and collate the relevant receipts and expense forms from cross-border travel, most businesses are trying to cut back on the number of hours spent on paperwork, so it is little wonder that so much of this tax remains unclaimed.
However, with such a large sum owed to businesses of all sizes, something must be done to get business owners to reclaim the VAT they are owed.
Given the need to recover this cash, business owners who are owed a substantial amount of money in unclaimed VAT could consider engaging a VAT reclaim company that could take care of the complex negotiations on their behalf.
These third-party organisations are used to dealing with the bureaucracy and administration involved in reclaiming VAT. They also have the legal and technical knowledge required for dealing with the wide range of tax authorities globally.