Can I claim input tax credit if I provide my services abroad?
December 5, 2022 | 40,00 EUR | answered by Marco Schottmann
Dear tax consultant,
I am Lucas Herrmann and I run a business that provides services abroad. I have heard that it may be possible to claim input tax deduction when operating abroad, but I am not sure if this applies to my case.
Currently, I mainly provide my services in various European countries, regularly receiving invoices for materials and other expenses. As I am keen on minimizing my costs, it would be important for me to know if I can claim input tax deduction for these expenses.
My concerns mainly lie in not knowing exactly how the regulations regarding input tax deduction work abroad and whether I might make mistakes that could have financial consequences for my business.
Therefore, my question to you is: Can I, as a business owner providing services abroad, claim input tax deduction for expenses? If so, how do I proceed exactly and what documents do I need for this? Are there any specific regulations I need to be aware of?
Thank you in advance for your help and support.
Kind regards,
Lucas Herrmann
Dear Mr. Herrmann,
Thank you for your inquiry regarding the claiming of input tax for expenses incurred abroad. As a tax advisor specializing in input tax, I can gladly assist you and provide you with all the relevant information on this matter.
In general, it is possible to claim input tax for expenses incurred abroad if certain conditions are met. In your case, as a business owner providing services abroad, you can usually claim input tax for your expenses in various European countries.
To claim input tax, you must have a valid VAT identification number in each country where you incur expenses. You must provide this number when making purchases so that foreign suppliers can correctly show the VAT.
In order to claim input tax, you must collect and keep the corresponding invoices for your expenses. These invoices must contain specific information, such as your VAT identification number, the supplier's VAT identification number, the amount of VAT, and the total amount of the invoice. These documents are important to prove, in case of a possible tax audit, that you are entitled to claim input tax.
There are indeed specific regulations related to claiming input tax abroad that you need to consider. For example, different deadlines for VAT refunds apply in different countries. Therefore, it is advisable to inform yourself about the respective regulations in the countries where you operate and, if necessary, seek professional support to avoid errors.
I hope this information is helpful and answers your question comprehensively. If you have any further questions or need assistance, I am at your disposal.
Best regards,
Marco Schottmann
