€20 Billion per Year going unclaimed by Online Brands like you
Unclaimed VAT by Online Brands in Europe
In the fast-paced world of e-commerce, online brands are constantly seeking opportunities to optimize their operations, scale their business, expand to new markets and boost profitability. Yet, one significant area often overlooked is the potential savings through reclaiming Value Added Tax (VAT). Each year, billions of euros in VAT remain unclaimed across Europe, presenting an untapped treasure for businesses operating in the online marketplace.
How VAT is Reclaimed
Value Added Tax (VAT) is a consumption tax levied on goods and services in the European Union (EU). For businesses, VAT is often a “pass-through” cost—collected from customers and paid to tax authorities. However, businesses also incur VAT on their expenses, such as marketing, software subscriptions, logistics, or travel. This VAT, often referred to as “input VAT,” can be reclaimed, provided the company is VAT-registered and complies with EU tax rules.
For online brands operating in Europe, reclaiming VAT is not just a compliance requirement but also a financial opportunity. Yet, research and industry reports reveal that a significant portion of VAT remains unclaimed every year by online brands.
How much VAT is unclaimed each Year by Online Brands
The quick answer is Billions of Euros!
Estimates put the figure at €20 billion. A study by the European Tax Policy Forum indicates that many companies, particularly SMEs and online retailers, forgo VAT recovery on cross-border expenses due to the complexity of the process.
Why are Brands just not claiming this money back
- For Brands operating in multiple countries this compliance can be a dauting task.
- Understanding how to claim this money back and what expenses are eligible can be changeling.
- Many Brands are unaware that they are entitled to claim back VAT
- With many online brands having high volumes of small transactions to multiple regions, it can be difficult to consolidate all the data.
- Many Brands does not understand that VAT paid at point of import is reclaimable.
How Online Brands can Reclaim VAT
- Ensure that the business is registered for VAT in the correct States.
- Maintain accurate records.
- Maintain regular audits to identify unclaimed VAT.
- Partner with VAT experts that have the infrastructure and platform capabilities to keep you compliant.
Taxmatic offers a streamlined platform that manages all of your VAT compliance and ensures you get all the money you are due when selling in Europe. For VAT registrations, IOSS, on-going compliance and VAT reclaims we have you covered.
