Carriers pay VAT on fuel, tolls and refreshments abroad. They are entitled to a refund, but the administration of the refund is quite demanding.
Like other businesses, carriers are entitled to a VAT refund on items they purchased abroad. Diesel purchases, toll charges, as well as refreshments and accommodation for drivers on the road can thus be noticeably cheaper. Partial refunds are also available in some countries for fuel excise duty. What's the catch? The administration of tax refunds is complex and demanding for companies in terms of time, capacity and know-how. However, there are services that make it much easier for companies to get their tax back.
"The possibility of tax refunds - specifically VAT and excise duty - is a welcome benefit for hauliers that few people miss out on. However, the chance to save money is at the expense of a rather demanding administration. If a company operates in several countries, it must deal with each country separately, know its specific conditions and legislation, and communicate in the local language.… It's quite complicated and the return periods are not very short either. For VAT it can take up to 8 months, for excise duty up to two years," describes the intricacies of tax refunds Zdeněk Fišer, Head of Tax Refund at Eurowag, a leading provider of integrated road transport solutions in Europe.
Companies like Eurowag therefore offer services to help their clients with the complex bureaucratic load. When clients pay for the service, Eurowag's tax experts will handle all the bureaucracy for them - from checking invoices (including third-party invoices) to filing the applications and communicating with the relevant tax authorities. If there is a problem with the return and the relevant tax office has additional requirements, Eurowag staff will also complete and translate the necessary documents.
"This is where our service is unique. We don't let our clients down, on the contrary. With our extensive experience of the tax refund process in different countries, we know exactly what is needed and when. For example, we also have an overview of which countries accept additional applications, how deductible costs differ and we know about many other details that internal accountants in companies simply do not have the chance to cover," explains Zdeněk Fišer.
According to Eurowag statistics, approximately 10% of VAT and excise tax refund procedures are checked by the tax authorities, who require additional documents in this context. In such cases, Eurowag communicates with the tax authorities and responds on behalf of its clients. In extreme cases, and if the VAT refund claim is wrongly rejected, Eurowag will appeal with reasonable grounds. Everything is included in the price of the service.
The lengthy administration of tax refunds can pose a cash flow problem for transport companies. This is why there are pre-funding services that allow carriers to receive money for tax refunds more quickly and, above all, on a regular basis. There is a relatively well established market called. fast net invoicing, which allows companies to prefinance submitted invoices essentially instantly.
"Fast net invoicing is a great way to get your tax back instantly. At Eurowag, we have decided to create pre-financing services for our clients that offer more favourable price tariffs while maintaining the principle of pre-financing. Many carriers want to relieve themselves of the administrative burden and gain certainty and regularity in their cash flow. They don't need to finance immediately, but up to eight months in the case of VAT and up to two years in the case of excise duty is a long time for them," explains the head of tax refunds at Eurowag.
Eurowag therefore offers its clients five VAT pre-financing schemes. In addition to the aforementioned fast net invoicing, this includes flexible financing in given time intervals (from a quarter to a year) or financing based on a certain amount of costs (for example, when invoices reach 1,000 euros, clients can also set different limits for different countries). The third option is hybrid prefinancing (the client determines whether or not he wants to prefinance the period in question) and the last one is the so-called. advanced payment (funding on application). Eurowag also offers the advanced payment scheme in the case of a refund of excise duty.
The pre-financing service is available to all Eurowag clients after credit risk verification. "Customers usually have an overview of how much money they spend abroad and in which countries, or whether they are interested in pre-financing. Based on this, we are able to recommend an appropriate refund service to our clients. Then we just need to sign a power of attorney, thanks to which we can represent the client before the tax authority," describes Zdeněk Fišer. Eurowag offers clients an easy overview of refunds via its client portal. In the future, it plans that customers will also be able to upload invoices for foreign purchases on which they wish to claim tax refunds via the client portal. "The client does not have to work further with the invoices issued by Eurowag because they are processed automatically. Eurowag collects invoices from other suppliers for further processing directly from clients in a pre-agreed manner and then uses the so-called "invoice processing". Artificial intelligence that significantly speeds up the reading of data from invoices describes Fišer.
The final step is to pay the tax refund. In the case of prefinancing, this is done by "uploading" money to the client's account. The refund is simply deducted from the price of other services customers use at Eurowag.
"We have processed a total of 60,000 applications for our clients in 2022 for both excise tax and VAT refunds. The service is popular not only with customers, who save their administrative capacity and have more control over their cash flow, but it also facilitates the work of the tax authorities of individual countries, which thanks to it deal with one representative instead of hundreds or thousands of companies," explains Zdeněk Fišer and adds: "Currently, the excise tax subsidy in Spain, which is valid until the end of 2023, is also attractive for clients. This gives hauliers who refuel in Spain a unique opportunity to reduce their costs this year."
For more information on the tax refund services Eurowag provides to its customers, please visit on the company's website.
Eurowag has been providing integrated mobility and payment services to international transport companies for more than 25 years. It is one of the fastest growing companies in Europe in its field. Its mission is to make the operation of the millions of trucks crossing Europe cleaner, fairer and more efficient. To this end, Eurowag offers its customers products and services based on modern digital technologies, ranging from payments for conventional and alternative fuels, electric vehicle charging and toll payments, to tax refunds, telematics and navigation, to a range of financial services and clean mobility advice.
Eurowag also supports innovation in philanthropy. As part of the Philanthropy and You project, in which ¾ of the company's employees regularly participate, each Eurowag employee receives an individual budget for philanthropy, as well as complete confidence in how the money is spent. The project has already inspired several other large IT corporations to undertake similar activities. For more information, visit Tax refund services.