VAT or Broccoli?
VAT on foreign hotel bills often sparks frustration — much like kids’ reactions to broccoli. Many businesses instinctively write it off, but in reality, reclaiming VAT is legal, possible, and could save significant money. This article explains why VAT recovery feels tricky and why avoiding it may cost more than you think.
From the lofty perch of professional travel management, one gains a curious view of human behaviour. Specifically, that of finance directors when presented with an international hotel bill that includes VAT. The reaction is usually the same as discovering a wasp in your morning croissant: surprise, irritation and an immediate desire to swat it away without further thought.
And yet, this is odd. Because VAT, like the wasp, is not here illegally. It is not doing anything wrong. In fact, it is often perfectly recoverable. Entirely lawfully. With receipts, forms, stamps and patience. Lots of patience.
This is where the plot thickens
Ask a corporate buyer whether they want to pay VAT on overseas accommodation and they will recoil as though you’ve suggested setting their company car on fire. “We don’t pay VAT abroad,” they say firmly. “We avoid it.” Avoid it? No. What they actually avoid is the recovery process, which has been engineered with all the warmth and charm of a Cold War border crossing.
The truth is that international VAT recovery is possible, legitimate and in theory, straightforward. In practice, however, it resembles trying to manoeuvre a cruise ship using a pedalo. Paperwork varies by country. Deadlines are inconsistent. Requirements are mysterious. Originals must be posted (yes posted!) to places that may or may not exist anymore. And if one comma is missing, your claim is rejected with all the ceremony of a slammed door.
So businesses do what humans have always done when faced with complexity: they pretend the problem doesn’t exist. They accept VAT as a sunk cost. A tax on sanity. A price paid not for accommodation, but for avoiding a complex and illogical admin marathon.
Which is fascinating, because VAT recovery is not immoral. It is not aggressive tax planning. It is not even clever. It is simply reclaiming money you were never meant to lose in the first place. Like querying a bill you accidentally paid twice. No one calls that “cheating”.
So why, then, is it so inconvenient?
From a travel management perspective, this is the great unanswered riddle. Governments actively encourage VAT recovery. The rules exist. The mechanisms exist. Specialist providers exist. And yet the process feels deliberately engineered to make you give up halfway through, muttering “it’s not worth it”, like the last time you abandoned assembling flat-pack furniture at 11pm.
The result? Millions in recoverable VAT quietly written off each year; not because companies can’t claim it, but because they can’t be bothered to fight the system designed to let them.
Perhaps the solution is simple. If recovering VAT weren’t such a slog, if it didn’t involve arcane rules, postal services and the constant fear of doing it slightly wrong, companies would happily pay it upfront. No drama. No avoidance. No creative routing via countries like Luxembourg.
Until then, VAT recovery remains the only refund process in the world where you’re made to feel guilty for wanting your own money back.
Conclusion: VAT Isn’t the enemy
VAT recovery isn’t wrong. It’s just inconvenient. And until that changes, businesses will continue to treat recoverable VAT the same way my kids treat broccoli: Theoretically acceptable, but not something they willingly choose unless absolutely forced to.
And somewhere, in a filing cabinet in Europe, your money waits patiently, wondering why you never came back for it.
