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Recoverable and non-recoverable taxes for travel agency

tallspirotallspiro Member Posts: 3

Hi all,
Let's imagine I have a travel agency based in Canada, who sells trips to Greece. In Greece where I do business, there's a VAT sales tax and the tax rate is 24%.

When I sell a trip for $1,000, I charge 15% HST (provincial tax). In other words, I collect $150.00 in HST taxes or a total of $1,150.

In order to be able to organize that trip, I have to rent accommodation and the accommodation costs $500 plus 24% VAT, where I pay 24% VAT, which works out to $120.

My question is this. Is this VAT tax that I pay in Greece recoverable in Canada?

Thank you!
Spiro

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in Accounting Technical Support

Comments

  • ConnorMConnorM Member Posts: 1,229 ✭✭✭

    Hey @tallspiro! This is a great question. Unfortunately, because this is a location-specific question, and has to do with tax liabilities in a particular area, the best bet here is going to be reaching out to a local tax professional. Because Wave is an international organization, it would be rough, to say the least, to try to keep up with tax policies in each area we service. We definitely appreciate your understanding with this.

    edited October 24, 2019
  • tallspirotallspiro Member Posts: 3

    Thank you @ConnorM. I did ask a local accountant and the answer was negative. You can't claim the tax as recoverable because it is coming from outside Canada. I can always use the amount of money I spent as expenses though.

  • EmmaPEmmaP Member Posts: 639 ✭✭✭

    Hey @tallspiro! Thanks so much for sharing the answer with us! We are always interested to hear what the outcome is :)

    edited October 25, 2019
  • tallspirotallspiro Member Posts: 3

    Hi @EmmaP

    I will try to share more info on this topic in the future. Thanks

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