VAT and excise
Not everything you paid comes back: deductibility depends on the country
Published: 2026-09-30
A foreign VAT refund claim is not a list of invoices. It is an assertion that every one of them meets the deduction rules of the Member State of refund.
The basic rule
Only the share of VAT that would be deductible in the Member State of refund, had the expenditure been incurred by a taxable person established there, is repaid.
Which means it is not your own country's rules that apply, but a foreign country's. And they differ more than people expect.
Where the differences are largest
Accommodation is fully deductible in some Member States and not deductible at all in others.
Food and restaurant services are restricted in many — sometimes by a percentage, sometimes entirely.
Fuel and running costs for passenger cars are often limited, even where the car is used for business.
Road tolls are usually deductible, but not every Member State charges VAT on them at all — in some they are a public levy with no VAT in them.
Why an over-broad claim is more dangerous
Intuition says: include everything, and the authority will strike out what it does not accept.
In practice it works differently. A refund obtained incorrectly or fraudulently is recovered directly, together with penalties and interest, under the procedure of the Member State of refund.
So an amount left out costs you that amount. An amount wrongly obtained costs the amount, a penalty and interest.
And one piece of good news
In 2025 the Court of Justice confirmed that the right to a refund cannot be denied on purely formal or administrative grounds — the principle of VAT neutrality applies.
Which means a rejection over a defect of form, where the substance is right, can be challenged. But that does not help where the expenditure is not deductible in the Member State of refund at all.
The practical conclusion
Before filing you need to know not only how much VAT was paid, but which category the expenditure falls into and which rules apply in that Member State.
The category is also mandatory as a formality: the claim states, for each invoice, a code describing the nature of the goods or services.