Why Reclaiming VAT Is So Challenging — and How VAT IT and Navan Are Making It Easy

Billions. That’s how much companies are leaving on the table every year due to unclaimed value-added tax (VAT) from travel expenses.

It’s shocking but not surprising. The VAT reclaim process is not only exceptionally complicated, but the rules are constantly evolving. It’s a paperwork nightmare — if the company is even aware it’s eligible for a refund.

Little wonder, then, that a full two-thirds of companies either skip VAT reclaim altogether or recover only a fraction of what they’re owed, according to a VAT IT internal benchmark study.

That’s a mistake. Business travel and expense data is one of the richest and most under-leveraged sources of VAT reclaim. Fortunately, the problem is fixable. Smart automation of VAT reclaim lets companies recoup the money they’re owed — without bogging down finance teams in manual work.

“The European VAT landscape changes weekly, and one missing data point can erase an entire reclaim/can jeopardize a company’s VAT recovery,” said Lourens van Pletzen, CEO of VAT IT. “By pairing Navan’s end-to-end expense data with VAT IT’s 24 years of specialization, we’re giving finance teams the confidence that every eligible euro is coming back to them.”

Let’s break it down.

The VAT Challenge

VAT (value-added tax) is a consumption tax imposed by more than 160 countries and applied to most goods and services, from business travel to everyday operational expenses. Companies may be eligible to reclaim VAT incurred on business-related expenses — such as hotels, restaurants, car rentals, and trade show fees — provided they’re not locally registered or required to be registered for VAT in the country where the expenses were incurred.

Simple, right?

Not exactly. Countries have different requirements and processes for reclaiming VAT, including which expenses — and what percentage of those expenses — are eligible for recovery. To make matters worse, those rules often change (and are becoming stricter, especially in Europe), and recouping even a portion of their money requires meticulous documentation. It’s a resource-intensive effort that can be crushing for finance teams.

Automated platforms can help, but often come with limitations. They may only capture certain transaction types or not collect enough data from each transaction. And fragmented T&E solutions house the necessary data in different places. On top of that, compliance requirements vary by country, like making sure you’ve collected all the invoices you need to support a compliant VAT refund claim. Navigating the complexities demands specialized expertise.

Exhausted yet?

The Opportunity

Maximizing VAT reclaim for T&E spend first requires a system that can capture 100% of T&E spend, regardless of payment type or where the spend took place. The system also has to capture the context of each spend — detailed line items like merchant category, country code, and GL codes.

That information should flow automatically to finance and accounting admins — within the same system they’re already working — to avoid manual exports and uploads. And the system needs to flag missing documentation or non-compliant submissions in real time, so employees have a chance to fix the problem. (This step is especially critical, as e-invoicing mandates across European countries create stricter documentation and data accuracy standards.) Additionally, the system should make clear the reclaim status and amounts so admins can see it in real time, and in the same system.

The key is starting with an integrated T&E solution. That way, the system can continuously process eligible transactions so the money comes back to the company faster than, say, on a quarterly or annual basis.

The Secret to Seamless VAT Reclaim

Navan has long been integrated with the experts at VAT IT; now, an even deeper integration makes optimizing VAT reclaim easier than ever.

“In 2025, we reclaimed $300 million in VAT on behalf of our customers, a milestone achieved through close collaboration with our trusted partners, such as Navan,” said Lourens van Pletzen, CEO of VAT IT. “This reflects our relentless focus on value for customers and our commitment to turning complex tax processes into straightforward savings.”

Every transaction that runs through Navan — card swipes, lodging folios, out-of-pocket repayments, even manually entered receipts — flows automatically to VAT IT. The company analyzes GL codes and merchant data, applies country-specific rules to each transaction, prepares and submits all refund claims, and gives finance teams clear, auditable reports.

The process gives finance teams time back to focus on more strategic work, while companies put more money back in their pockets. It’s truly a win-win.

Even better, once customers are introduced to VAT IT, admins can enable automated reclaim in minutes, right within the Navan platform — no complicated setup required.

Want to maximize your organization's VAT reclaim? Talk to the Navan team and we’ll get you started.