Exported Goods: How U.S. Businesses Recover VAT on Purchases made Overseas

Why VAT on Exported Goods Matters for U.S. Businesses

U.S. companies increasingly buy equipment, components, and prototypes overseas. A California aerospace manufacturer may source specialist machinery in Germany. A New York pharmaceutical company may purchase lab samples in Switzerland. In most cases these purchases attract local VAT, often between 15 and 27 percent.

For goods that are exported out of the country of purchase, that VAT is frequently recoverable. In practice this can mean tens of thousands of dollars back on a single shipment. Industry estimates suggest that U.S. companies leave very large amounts unclaimed each year on exported goods, particularly in manufacturing and technology, simply because the process looks complicated or no one owns it internally.

The problem is not eligibility but proof. Each jurisdiction has its own documentation rules, deadlines, and technical definitions around exports. If you cannot prove that the goods left the country and were used for non-local business activities, the VAT will stick. If you can prove it, recovery rates can be very high.

This guide, updated for 2025 rules including post-Brexit UK changes and EU digital submission requirements, sets out how U.S. companies can recover VAT on exported goods. It covers the main categories of qualifying goods, the export evidence tax authorities expect to see, the key country regimes, the pitfalls that derail claims, and how a structured approach can turn foreign VAT from a sunk cost into working capital.

The VAT Refund Landscape for Exported Goods

VAT is a consumption tax that should not apply to exports. Under most systems, domestic sales are taxed but goods that leave the jurisdiction are either zero-rated at source or eligible for a refund after the event.

For non-resident businesses, refund schemes sit on top of this basic principle. Examples include the EU 13th Directive for businesses established outside the EU, the UK Overseas VAT Refund Scheme under HMRC Notice 723A, and equivalent regimes in Switzerland, Norway, Israel, South Africa, Singapore, and other markets.

The common conditions are familiar:

• The claimant is not established or VAT registered in that country

• The goods are used for business activities outside that country

• The goods are exported within a set time frame and the export can be proven

• The claimant’s home country offers reciprocal treatment to businesses from the refund country

Sometimes the supplier can zero-rate the sale if you provide export evidence before or shortly after the shipment. More often, U.S. companies pay the VAT up front, then reclaim via a refund application once the export is complete. Deadlines are strict. Many EU claims must be submitted by 30 September for the prior calendar year. UK claims for the prescribed year must reach HMRC by 31 December. Miss the deadline and the right to reclaim is lost.

When the process is managed properly, refunds are material. Processing time in many countries is around four to six months. Refunds are paid in local currency to your bank account and converted into dollars on receipt. For businesses that regularly buy goods overseas for export, this can be a consistent source of cash flow.

What Types of Goods Qualify for VAT Refunds?

Not every overseas purchase qualifies. The key tests are business purpose, non-local consumption, and verifiable export. In general, the goods must be used for your U.S. operations or other non-resident activities, rather than sold, installed, or consumed in the country of purchase.

Below are some of the most common categories where we see strong recovery potential for U.S. companies.

1. Tools, Machinery, and Technical Equipment

This is often the largest category by value. Examples include CNC machines sourced from Italy, precision tools bought in the UK, or specialist testing rigs in Germany.

Under the EU 13th Directive and similar schemes, VAT on this type of equipment can be reclaimed if the goods are exported out of the country, either unused or after limited testing, and not treated as long-term fixed assets in the local jurisdiction.

A typical scenario would be a U.S. automotive manufacturer that buys welding equipment in Manchester for use on a Detroit production line. The UK supplier charges 20 percent VAT. Once the equipment is exported and the correct customs documents are in place, that VAT is normally recoverable through HMRC, provided the U.S. business meets the non-resident and reciprocity conditions.

Practical points for U.S. firms:

• Ensure invoices are addressed to the U.S. entity, not to a local agent or individual

• Retain any calibration or test certificates that show the goods are for business use

• Keep all export documents together with the original invoices in a digital file

For high-value machinery, the recovered VAT can be significant relative to the cost of implementation.

2. Testing Equipment, Samples, and Prototypes

Pharmaceutical, biotech, and electronics businesses often purchase small volumes of high-value samples or prototypes abroad. These are tested, validated, or certified in the country of purchase, then exported to the United States for further trials or regulatory work.

Examples include diagnostic devices sourced from Scandinavian labs, electronic boards from manufacturers in Central Europe, or chemical compounds from specialist facilities in Switzerland or Israel.

These purchases often qualify for VAT refunds because they are clearly linked to non-local R&D and trials. The main weakness tends to be documentation rather than eligibility. Samples are sometimes treated informally, with poor invoice descriptions or incomplete export records.

Practical points for U.S. firms:

• Make sure the invoice describes the items as samples, prototypes, or test equipment for export

• Link the sample to a specific project or regulatory process, for example an FDA submission or a defined clinical trial

• Ensure customs documents and courier records are filed in a way that ties each shipment back to the invoice

Handled correctly, this category can produce meaningful refunds for R&D-heavy businesses over the course of a year.

3. Exhibition and Demonstration Goods

Trade fairs and exhibitions create another strong opportunity for VAT recovery on goods. U.S. companies frequently ship demonstration units, display kits, and stand materials to international events, then ship them back or onward afterwards.

Typical examples are drones at a technology show in Germany, medical equipment at a health conference in the UK, or industrial components at a trade fair in Norway or Singapore.

Tax authorities generally view these items as temporarily imported for promotion rather than for sale or local use, provided they are exported again after the event. VAT on these goods is often reclaimable if you can show that they left the country.

Practical points for U.S. firms:

• Use clear internal labelling and shipping documentation that identifies items as demonstration goods for export

• Coordinate with exhibition contractors to keep records of what is shipped in and out

• Keep freight forwarder documentation and customs declarations attached to each event

With the global exhibition calendar recovering, many exporters now spend substantial amounts on exhibition goods. Treated properly, most of that VAT can be reclaimed.

4. Product Components and Spare Parts

U.S. businesses that source components or spare parts overseas for use in U.S. production or maintenance can also reclaim VAT in many situations.

Examples include semiconductor components sourced from Israel, drill parts purchased in Norway for use on U.S. rigs, or specialist engine parts from EU suppliers. The goods must be exported and incorporated into products or activities outside the country of purchase.

The main conditions are that the goods are not used for local repairs, maintenance, or resale, and that export can be proven.

Practical points for U.S. firms:

• Maintain a bill of materials that links specific components to finished goods that are exported or used in the United States

• Avoid routing parts through local entities in a way that could be seen as local use

• Keep logistics partners aligned so that customs documentation is complete and retained

For companies with significant overseas sourcing, the VAT on components alone can represent a sizeable annual recovery.

5. Marketing and Promotional Materials

Marketing materials are often overlooked. Banners, printed brochures, and branded merchandise purchased abroad for export to the United States can also qualify where they are not distributed locally.

Purchases might include exhibition graphics in Switzerland, promotional packs in Singapore, or printed materials in EU Member States that are shipped back to U.S. marketing teams.

The challenge is to show that the materials were not consumed locally and were instead exported for use in the U.S. or other non-resident markets.

Practical points for U.S. firms:

• Keep inventory records or distribution logs that show materials leaving the country of purchase and arriving in the United States

• Match courier or freight records to the invoice level

• Be clear in internal documentation that the items are for non-local campaigns

Individually these amounts can be modest, but across a portfolio of campaigns the cumulative VAT adds up.

Proof of Export: The Foundation of every Claim

Whatever category the goods fall into, export evidence is central. Tax authorities expect clear, consistent documentation that shows the goods have physically left the country of purchase and are not consumed locally.

Core documents usually include:

• Air waybills or bills of lading that show the shipper, consignee, and destination

• Customs export declarations, such as the EU Single Administrative Document or the UK C88, including any official stamps or electronic confirmations

• Commercial invoices that match the supplier invoices in description, quantity, and value

• Courier tracking reports confirming delivery to the U.S. or another non-resident destination

For temporary imports and re-exports, additional documents such as ATA Carnets may apply. For high-value goods, photos of sealed crates, packing lists, and inspection reports can all help support a claim.

Consistent description is important. If an invoice describes “precision machinery” and the export declaration describes “test equipment,” that mismatch can trigger questions and even rejection. The more alignment there is between documents, the lower the risk.

A disciplined process normally looks like this:

• Before purchase, agree with the supplier that the goods are for export and confirm whether zero-rating is possible

• At export, obtain all customs and carrier documentation and file it immediately with the original invoice

• After arrival, retain U.S. customs entry documents as secondary proof where available

• Store all documentation in a structured digital archive so that it can be provided quickly if the tax authority raises a query

Most failed claims on goods come back to weaknesses in export proof rather than eligibility.

Countries with Refund Options: How the Main Regimes Work

Many jurisdictions operate VAT or GST refund schemes for non-resident businesses that buy goods and export them. The framework is broadly similar, but each country has its own rate, documentation requirements, deadlines, and minimum claim thresholds.

In the European Union, all Member States apply VAT at rates that broadly range from the high teens to the mid-twenties in percentage terms. Under the 13th Directive, a U.S. business that is not established in the EU can submit claims to each Member State where VAT was incurred. Goods such as machinery and components that are exported can qualify, provided standard conditions are met. Claims are usually made for a calendar year and must be filed by 30 September of the following year. Many states set a minimum claim amount, for example four hundred euro in total VAT for an annual claim.

In the United Kingdom, HMRC operates the Overseas VAT Refund Scheme for non-UK businesses. The standard VAT rate is 20 percent. VAT incurred on goods that are imported or purchased in the UK and then exported for business purposes can often be reclaimed, as long as there is no UK establishment and no UK VAT registration obligation. The prescribed year runs from 1 July to 30 June and claims must reach HMRC by 31 December. There is a small minimum threshold for claims, but most corporate applications exceed it comfortably.

Switzerland applies a standard VAT rate that is lower than most EU states but still significant on large purchases. Foreign businesses can recover VAT on goods that are bought in Switzerland for business purposes and exported. The Swiss authorities require a clear business link and valid customs proof, and they set both deadlines and a minimum claim threshold which businesses should check before filing.

Norway operates a similar regime, with a relatively high standard VAT rate, and provides refunds to foreign businesses that are not carrying out taxable sales in Norway. Goods must be for non-local business use and exported, and claims are normally due by the middle of the year following the period in which the VAT was incurred.

Israel allows zero-rating for many export transactions where the supplier has sufficient evidence that the goods leave the country, and refunds may be available where VAT is charged and later reclaimed. This can be particularly relevant for technology companies purchasing prototypes or components.

South Africa, through its VAT system, can refund VAT on goods that are exported under prescribed conditions, often within a short time frame such as ninety days from the date of purchase, and with strict proof requirements.

Singapore applies GST rather than VAT, but the principle is similar. Goods purchased in Singapore for export can often qualify for GST refunds where they are not used or consumed locally and where export is proven through freight and customs documentation.

In all of these regimes, two themes repeat. The business must be genuinely non-resident for tax purposes. The export must be properly documented. When those conditions are satisfied, refunds on exported goods are usually achievable.

Common Pitfalls that derail Goods Refunds

Even strong cases can fail if the basics are not handled well. Across the main regimes, the same issues appear repeatedly.

Common problems include:

• Missing or incomplete export documentation, especially air waybills or bills of lading

• Supplier invoices that do not show a valid VAT or GST registration number

• Invoices addressed to individual employees or to local agents instead of the U.S. business entity

• Poor or inconsistent descriptions of goods between invoices and customs documents

• Goods misclassified in a way that suggests local consumption rather than export

• Claims submitted after the statutory deadline

• No adjustment for partial exemption where the U.S. business carries out exempt activities

In one case, a U.S. exporter lost a substantial Norwegian refund because the invoices and export documents did not match and the tax authority was not satisfied that the goods in each document set were the same. All of this could have been avoided with better controls at the time of purchase and export.

How Antravia Supports VAT Recovery on Exported Goods

Running this process in-house is possible, but it requires coordination between tax, finance, procurement, logistics, and local suppliers. Errors usually appear where responsibility is split and no one has full visibility of invoices, exports, and deadlines.

Antravia supports U.S. businesses by managing the VAT recovery lifecycle from end to end for exported goods. In practice this includes:

• Reviewing historical and current invoices to identify reclaimable goods purchases in each jurisdiction

• Working with suppliers to correct non-compliant invoices and ensure future documentation meets local rules

• Collecting and checking export evidence from freight forwarders, customs brokers, and courier partners

• Preparing and submitting claims under the relevant schemes, such as the EU 13th Directive and HMRC’s Overseas VAT Refund Scheme

• Tracking deadlines and following up with tax authorities until refunds are processed

• Training accounts payable and logistics teams so that new purchases are structured correctly from the start

Many clients prefer a contingent fee model, where professional fees are linked to successful recoveries. That way there is no additional fixed cost while the process is being established.

Conclusion: Turn Export VAT into Working Capital

VAT on exported goods does not have to be a permanent cost. For U.S. companies that source machinery, components, samples, and promotional materials overseas, there is often a clear route to recovery, provided that the structure and paperwork are right.

A disciplined approach to invoicing, export documentation, and deadlines can release cash that would otherwise remain with foreign tax authorities. For manufacturers, technology firms, and R&D-led businesses, this can build into a recurring annual benefit.

If your company has been purchasing goods overseas and exporting them without reviewing the VAT position, now is the time to start. A simple review of your last few shipments is often enough to identify whether there is money to recover.

Ready to assess your position? You can upload sample invoices and export documents for an initial review or schedule a short call to discuss your current process. At Antravia, we specialize in guiding U.S. businesses through these intricacies to maximize returns. Initiate your 2025 claim assessment today with our complimentary eligibility review, just upload a sample invoice for tailored insights. Contact us

Last updated: 14 November 2025. This guide is general in nature. Always seek advice that is specific to your facts and jurisdictions.

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References

1. HMRC. (2025). Refunds of UK VAT for non-UK businesses (VAT Notice 723A). GOV.UK. https://www.gov.uk/guidance/refunds-of-uk-vat-for-non-uk-businesses-or-eu-vat-for-uk-businesses

2. European Commission. (2025). VAT rules and rates: standard, special & reduced rates. https://europa.eu/youreurope/business/taxation/vat/vat-rules-rates/index_en.htm

3. Skatteetaten. (2025). Refund of value added tax to foreign businesses. https://www.skatteetaten.no/en/business-and-organisation/vat-and-duties/vat/foreign/refund-of-vat-to-foreign-businesses/

4. KPMG. (2025). Swiss VAT refund: How to reclaim as a non-resident business. https://kpmg.com/ch/en/insights/taxes/vat-refund.html

5. Forvis Mazars. (2025). VAT & Indirect Exports: What South African sellers should know. https://www.forvismazars.com/za/en/services/tax/tax-insights/what-south-african-sellers-should-know

6. SARS. (2024). VAT Refunds for tourists and foreign enterprises. https://www.sars.gov.za/types-of-tax/value-added-tax/vat-refunds-for-tourists-and-foreign-enterprises/

7. Concur. (2018). Research Reveals Nearly Two-Thirds of U.S. Companies Fail to Reclaim VAT. https://www.concur.com/blog/article/research-reveals-nearly-two-thirds-us-companies-fail-reclaim-vat-us-travelers

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
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