To begin with, be aware that if your employees travel by train, plane or boat, it will not be possible for your company to recover the deductible VAT. Indeed, these means of transport are not subject to it. This is also the case for mileage charges. These allowances are not affected by deductible VAT. However, it can be recouped from fuel costs.
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Recovery of VAT on “fuel” expense reports
Currently, the recovery of VAT on diesel is still favored over that of gasoline. In order to harmonize these two fuels, the State has planned a 5-year alignment of the gasoline VAT regime with that of diesel, which will be total in 2022.
The recovery of VAT on fuel concerns both professional vehicles (belonging to the company) and personal ones. However, for the latter, it will be necessary to prove that the trips are made within the framework of the employee’s activity.
VAT recovery on toll and parking expense reports
As with fuels, VAT can also be recovered on the costs of motorway tolls and parking costs (and other parking lots). Of course, keep in mind that this recovery is only possible if the trips have been made in the interest of the company. Using the 1099 tax calculator is essential in such a case.
In addition, it is also necessary that these costs be justified, therefore accompanied by supporting documents. And, for the latter to be admissible, they must include:
- The name of the company;
- The name of the driving employee;
- The address (head office) of the company;
- The registration number of the vehicle;
- The object of the move.
For parking, VAT is recoverable only in certain cases:
- For spaces reserved for customers
- For places reserved for visitors
- For spaces reserved for staff
The recovery of VAT on the accommodation expenses
When your employees find themselves obliged to sleep in a hotel (or other similar services), you can recover VAT on the expenses incurred.
However, as always, these expenses must have been made in the best interests of the business. In addition, invoices must be drawn up in the name of the company, and especially not that of the employee! However, the latter must still be identified on the document (it can be added by hand).
Additional costs related to accommodation, such as breakfasts or meals and drinks consumed at the hotel are also eligible for VAT.
Justify the professional nature of the catering expense reports to recover VAT
VAT may be recoverable on catering and other hospitality expenses. As for overnight stays, the expenses must be justified and the supporting documents in the name of the company, the names of employees (and potential guests) must also be added.