Prepare a foreign-VAT exception for the right decision

First identify the tax

Look at the tax label, rate, supplier establishment, customer name, VAT identifiers, place of performance and currency. “VAT” or “TVA” is not evidence that the amount belongs in a German VAT return. A card or bank statement is even less informative.

Each row can lead to a different rule. The table is a triage aid, not a treatment matrix.

Review sequence

1. Confirm the legal supplier and recipient.
2. Describe the supply precisely and locate where it occurred.
3. Verify the tax country, rate and invoice requirements.
4. Ask whether the charge should be corrected at source.
5. If the tax is valid, determine whether a refund route or local obligation applies.
6. Decide the bookkeeping treatment only after that conclusion.
7. Retain the decision, source and review date.

Example: conference invoice

A German consultancy receives a €1,190 invoice for an in-person conference abroad, including €190 local VAT. It would be wrong to assume that the €190 is German input VAT. The team must confirm the place and nature of the event service, whether local tax was correctly charged and whether a refund claim is available and worthwhile. If the invoice itself is wrong, correction may be more appropriate than refund. The answer depends on the country and facts.

Prepared case packet: a studio purchase abroad

A Pilates studio buys equipment during a workshop trip in France. The invoice shows €840 including French VAT; the company card shows the same amount. A useful case packet contains the complete invoice, supplier and customer entities, purchase and delivery location, workshop itinerary, business purpose, payment, and any supplier correspondence.

DeinHans can preserve the original document and payment, extract the stated country, currency and tax, attach the owner’s business-purpose answer, and route the exception with a specific next question: “Was the equipment collected and used in France, delivered to Germany, or connected to the event?” It does not select a German VAT code, decide that the foreign tax is recoverable, or submit a refund claim.

The accountant then chooses the documented route: request correction, investigate a refund, obtain local advice, or apply another reviewed treatment. The reason and effective facts stay with the case so the next French invoice is context—not an automatic rule.

Frequent failure modes

• Selecting a German VAT code because the percentage is 19%.
• Treating a card receipt as a tax invoice without checking required details.
• Mixing import VAT with supplier-charged foreign VAT.
• Ignoring a supplier’s corrected invoice after the original was booked.
• Filing a refund without confirming eligibility and deadlines.

Professional boundary: Foreign VAT recovery and registration rules vary by jurisdiction and transaction. Use current official guidance for the country concerned and involve a qualified adviser.

A reusable case note

For recurring vendors, keep a public-facing case note with the business facts, document role, approved treatment, reviewer, date and conditions that would trigger re-review, such as a new supplier entity, service location or tax statement. Do not reduce the conclusion to an unexplained automation rule; future reviewers need to understand why it was appropriate.

Track the resolution route

Give each case a status: correction requested, correction received, refund under review, refund submitted, local advice required, treated as cost under approved decision, or closed for another documented reason. Record amount, currency, tax country, deadline, owner and expected economic benefit. This prevents small foreign-tax amounts from disappearing and large ones from missing a filing deadline.

If a refund claim is pursued, reconcile the submitted invoice population, amounts claimed, authority response and cash received. A bank refund can arrive net, combined or in another period; retain the claim reference so it is not mistaken for sales income.

Supplier correction control

When the supplier issues a corrected invoice, compare legal parties, invoice reference, tax amount and cancellation language. Link the new document to the original and ensure the expense or payable is not duplicated. If the supplier refuses correction, preserve the response and route the case to the adviser rather than choosing a convenient German VAT code.

Review the case when business use, service location or customer entity changes. The approved conclusion belongs to the documented facts, not permanently to the vendor name.