reclaimable VAT

Reclaimable VAT refers to the value-added tax that a business can recover on expenses related to its operations. When a company purchases goods or services, it pays VAT to suppliers. If the company’s sales are subject to VAT, it can offset the VAT it paid on purchases against the VAT collected from customers. This process allows businesses to recover the VAT they have paid on business-related expenses, effectively reducing their tax liability. Reclaiming VAT helps businesses manage cash flow and ensures they are not double-taxed on the same goods or services.