Eurocard will be rolling out the fintech company Cardlay’s solution Vattax for reclaiming VAT automatically to small and medium-sized enterprises across the Nordic region.
According to PwC, millions of unclaimed VAT Euros are in store for SMB’s in all of Europe when travel activity begins to pick up again.
Vattax has been developed by the Danish fintech Cardlay in partnership with PwC’s VAT department. Initially, the solution was launched exclusively in Denmark at the end of 2019. At that point, Cardlay and SEB Kort, which operates Eurocard, engaged in a Nordic cooperation to develop a white label solution for expense management - of which Vattax is also a part.
Rolling out the automated VAT reclaim solution to the whole of the Nordics is the next step in the partnership, which is particularly targeted at small and medium-sized enterprises that in large measure miss out on or give lower priority to claiming EU VAT refunds due to lack of knowledge and resources.
In spite of the corona pandemic and minimal travel activity, the solution has already been adopted by more than 25 per cent of the Danish businesses that use Eurocard’s corporate card and the Eurocard Pro app featuring expense management and VAT reclaim services.
“It goes without saying that corona and the significantly lower travel activity have been a massive obstacle to onboarding the number of users of the Vattax solution in the Eurocard Pro app we have the capacity to handle. Having said this, however, we’ve achieved a high market penetration among Danish businesses in spite of the lower travel activity. That’s why we are now launching throughout the Nordic region from the beginning of 2021. This means we’ll be fully prepared for the rebound of business travel in Denmark, Sweden, Norway and Finland,” says founder and CEO of Cardlay, Jørgen Chr. Juul.
According to the company, Cardlay’s VAT reclaim solution is the first ever AI-based solution to automatically help small and medium-sized enterprises reclaim foreign VAT. VAT is traditionally a cost accumulated by small Danish enterprises from business trips around the European countries, as the EU VAT reclaim process is too time-consuming and complicated.
Lose out on huge sums of money every year
In a report by the European Commission, it was found that 80 per cent of all European businesses do not reclaim VAT on purchases made in other EU member states. For that reason alone, small and medium-sized enterprises lose out on huge sums of money every year in unclaimed VAT.
“The ability to reclaim VAT and handle expense management automatically, features that are built into the Eurocard Pro app, opens up a whole new world for most of the small and medium-sized enterprises with employees who travel frequently. Reclaiming VAT is usually a tricky and time-consuming process. And earlier, the amount was decisive for whether it was worth spending a lot of time claiming a refund. But with the Vattax solution, which Cardlay and Eurocard are now rolling out to all parts of the Nordic region, it takes less than a minute to submit an expense receipt for approval, whether you’re reclaiming 10 Euro or 1000 Euro,” PwC partner Claus Boldt explains.
PwC has for instance contributed country-specific VAT knowledge from all its local EU offices, allowing for the storage and integration of all applicable EU VAT rules with the Cardlay real-time solution.
The new solution makes it possible for corporate customers using Eurocard Pro to reclaim foreign VAT expenses automatically and fully digitally. For instance, in connection with hotel accommodation, restaurant visits and car rentals within the EU.
All that is required is that payments have been made with a Eurocard and that the receipts are handled in the Eurocard Pro app with the integrated expense management feature. When a transaction is complete, take a photo of the receipt and answer a few expense questions in the app. Then the VAT refund will be claimed automatically.
“Now that our technology is an integral part of the services Eurocard offers to small and medium-sized enterprises in the Nordics, we are confident that we will manage to place Vattax firmly on the agenda. The amount of money that is potentially at stake, waiting to be reclaimed from all over Europe, is colossal. It is clear that the pace of expansion in the Nordic region depends on how fast businesses will resume a more normal level of travel activity. However, recent weeks’ reports on effective COVID-19 vaccines give us cause for optimism,” says Jørgen Chr. Juul.