International Travel and the Costs to Your Business

5 May

Planning a business trip? You might be leaving money on the tarmac. Many South African companies overlook one of the easiest ways to improve cash flow — reclaiming VAT on international travel expenses.

Can you claim the VAT on an international flight booked for your business?

Let’s break down what you can recover, what you can’t, and where to find hidden VAT hiding in your travel invoices.

The Quick Breakdown

International airfare is zero-rated under section 11(2)(a) of the VAT Act. That means VAT is charged at 0%, so there’s nothing to claim.

Agent fees charged by a travel agency may include standard-rated services, like admin or local bookings, and that portion of VAT can be claimed if supported by a valid tax invoice.
Accommodation and services rendered outside SA? Also zero-rated under section 11(2)(k).
Airport passenger taxes? Not VATable at all — it’s a pass-through cost collected on behalf of the airport or government.

So even though your client might be paying a South African supplier, the nature of the supply (i.e. international travel) determines whether VAT is claimable — not just who issues the invoice.

🧾 When Can You Claim VAT?

You can claim VAT only on the portion of the transaction that is standard-rated (15%) — such as:

A fee for arranging a local flight
Admin charges or additional services are billed separately
Any add-ons not directly linked to the international transport component

Just make sure a VAT-registered supplier issued a valid tax invoice.

Your VAT Recovery Cheat Sheet

👀 Watch for This Trap

Sometimes all these services are bundled together. But per sections 8(15) and 10(22) of the VAT Act, you must split the bundle and only claim VAT on the standard-rated portion. Don’t claim VAT on the full amount — SARS will spot the overreach!

🔍 Reclaiming Foreign VAT

Even if your business pays for accommodation, transport, meals, or event tickets overseas, you may be eligible to reclaim foreign VAT — depending on the country’s refund rules. These include:

Hotel and short-stay rentals
Client entertainment (in some jurisdictions)
Telecoms (international roaming, WiFi)
Meals and catering
Local transport (car hire, taxis, parking)

Some countries allow foreign VAT claims for up to four years back. That’s real money you could put back into your business.

🚀 Turn Missed VAT Into Found Cash

International travel doesn’t have to be a sunk cost. Even if the plane takes off VAT-free, the paper trail it leaves behind could hold real savings. Keep your eyes on the details — and help your business claim what it’s owed.

Want to help your clients reclaim even more? Look into specialist services that track and submit foreign VAT refund claims globally.

📌In Summary

When it comes to VAT and international flights, the flight may be duty-free, but your diligence shouldn’t be. Only claim what’s legit, and always check if the VAT was charged, not just assumed.

🧳A Simple Example

ABC (Pty) Ltd sends its sales manager to attend a trade show in London. The company arranges the trip through a local travel agent in Johannesburg. Here’s what’s on the invoice:

International return flight (SA–UK), R18,000, Zero-rated (0%)
Travel agent admin fee, R1,500, VAT incl. (15%): R195
Hotel in London (3 nights), R6,000, Zero-rated (0%)
Airport taxes R1,200, not subject to VAT.

What can you claim as Input VAT?

✅ You can only claim the VAT on the agent's R1,500 admin fee, which is standard-rated. R1,500 × 15% = R195 input VAT (claimable if valid tax invoice is issued)

❌ No VAT can be claimed on: