Are you an entrepreneur? Then you pay VAT on your business expenses. But good news: you can often get that VAT back. This is called input tax. It can actually save you a lot of money. Yet many entrepreneurs miss opportunities here. And that is a shame. In this article we will tell you all about input tax. How it works, when you can deduct it and which mistakes you should avoid.
Preload significance
By input tax, we mean the VAT you pay on your business expenses. Think of a laptop, an accounting subscription or your work phone. Good to know: you can recover this VAT from the tax authorities. So you advance it first, but deduct it again in your VAT return. You do that in box 5b: input VAT. It's that easy. For many entrepreneurs, it is a good way to cut costs. So don't miss this opportunity.
Preload calculation
A business invoice usually shows VAT separately. Add up all the VAT amounts of your business purchases per quarter. Enter this total as input VAT on your tax return.
Just an example: you buy a laptop for €1,000 + €210 VAT and an accounting package for €20 + €4.20 VAT. In total, you can claim back €214.20. This is offset against the VAT you received from customers. So in the end, you only pay the difference. That's easy money.
So make sure you keep receipts and invoices well, so you can always prove what you bought.
Deduct input VAT
You cannot just reclaim VAT for every purchase. In fact, there are rules for that. First things first: if you don't charge VAT to your customers yourself, you can't deduct VAT either. Also, your invoice must be correct. It must be complete, error-free and in your company's name.
Deducting VAT is not allowed anyway at:
- Private expenses, even if you accidentally paid them on a business basis
- Food and drink on the road or at customer appointments
- Incomplete or vague receipts (such as a loose debit receipt)
- Expensive corporate gifts without proper registration
So always check carefully whether you really can reclaim the VAT. It saves hassle afterwards.
Overview: what is allowed and what is not
| Issue | Input tax deductible? | Comment |
| Laptop for work | Yes | If invoice is in name |
| Business software | Yes | Think accounting |
| Lunch with colleague | No | Food and drink may not |
| Gift worth €80 for customer | No | Above threshold unless registered |
| Tank voucher without company name | No | No valid invoice |
| Bookkeeper or tax specialist | Yes | Fully deductible |
Preload examples
Example 1 - However, input tax
Need a new printer? You buy one for €200 excluding VAT. The printer's invoice is in your company's name and you only use it for business. Perfect, then. So you can deduct that €42 VAT on your tax return. Just fill in box 5b and you're done. The tax authorities will refund it.
Example 2 - No input tax
Hungry on the go? You buy a sandwich for €8.50 and save the receipt. But alas. The sandwich is not in a business name. And what's more: you can't deduct food and drink. Not even if you eat it between client appointments. The tax authorities are very strict about this. So don't put this in your tax return.
Conclusion
As a business owner, you can reclaim VAT on business expenses. You arrange this on your VAT return under box 5b. Sounds simple, but not every purchase qualifies. This is because the expenses must really be business-related. You must charge VAT to customers yourself and the invoice must be complete and correct.
Claiming VAT back on food and drink? Forget it. Private expenses and obscure receipts without details also fall by the wayside. By being aware of this, you will avoid hassles and get the most out of your VAT return. In doubt about this? It never hurts to check or consult with your accountant.
