Can I Claim VAT on Mileage?
Yes, but indirectly. You do not claim VAT on the mileage rate itself; you claim the VAT on the fuel receipts that back up the business mileage. In most EU jurisdictions the fuel portion of a mileage allowance carries a reclaimable VAT fraction, but the exact rate, documentation requirements, and whether a simplified flat-rate scheme applies vary by country — check with your accountant.
The rule that catches people out: the mileage allowance you pay yourself or an employee is not a VAT-bearing transaction, so you cannot reclaim VAT on the lump sum. What you can reclaim is the VAT element of the fuel purchased for those business kilometres, calculated using your country’s published fuel-to-mileage ratio. You need actual fuel receipts (not just a mileage log) and a record of which kilometres were business. An AI employee like Nika can file those fuel receipts the day they arrive — from $0.40 per processed invoice — but the VAT calculation itself is your accountant’s job.
The honest caveat: this area is full of country-specific edge cases. Some jurisdictions offer a simplified scheme where you reclaim a flat percentage; others require a detailed fuel-purchase analysis. The Cost of Work Index prices the underlying bookkeeping tasks, but the reclaim rules change — always confirm the current rate with a local tax adviser.
Related questions
Do I need fuel receipts to claim VAT on mileage?
Yes. A mileage log alone is not sufficient. You need actual fuel receipts that correspond to the business kilometres driven, and the VAT reclaimable is calculated from the fuel portion, not the mileage rate itself.
Can AI bookkeeping handle mileage VAT claims?
The AI employee can enter and file fuel receipts the same day they arrive, but the VAT reclaim calculation on mileage requires professional judgment and country-specific rules. That decision stays with your accountant.