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E-invoicing and VAT recovery: turning a compliance shift into recovered VAT

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This article is part of a three-episode video series produced with our partner Amadeus Cytric. In this third episode, our Managing Director Damien Moras discusses with the Amadeus Cytric team how e-invoicing turns a long-standing data-quality problem into a VAT recovery opportunity on travel and expenses.

Why e-invoicing is the data quality upgrade that VAT recovery on travel has been waiting for

E-invoicing is usually discussed as a regulatory shift, with deadlines and system requirements at the centre of the conversation. For VAT recovery on travel and expenses, it is also something more interesting. The same shift forces an improvement in the quality of invoice data that has limited VAT recovery for years, and creates an opportunity that finance and tax teams can capture if they design for it now.

This article looks at why VAT recovery on travel has long been limited by invoice data quality, what changes under e-invoicing, and how you can position your organisation to recover more VAT once the new flows are in place. In the European Union, this shift is being driven by the VAT in the Digital Age (ViDA) reform and national e-invoicing mandates being rolled out country by country.

Key takeaways

E-invoicing and VAT recovery on travel and expenses, what you need to know:

  • How to spot where VAT recovery on travel breaks down
  • How to design for travel expenses above and below the e-invoicing threshold
  • How the data foundations of VAT recovery are built
  • How to capture the VAT recovery opportunity e-invoicing creates

How can you spot where VAT recovery on travel breaks down?

If you want to recover more VAT on travel, look at the invoice itself, not at the claim. That is where most of the VAT recovery opportunities are gained or lost.

Start with the documents your travellers bring back. Vendors do not always issue invoices with VAT deductibility in mind. Some are non-compliant. Others are technically compliant but missing the information that determines how the VAT should be treated. Take the hotel invoice for example: a single document can include accommodation, breakfast, dinner and parking, and each item can follow a different VAT rule. When the invoice is not itemised, the safest treatment applies, and recoverable VAT is left on the table.

In our previous articles, we covered the structural factors that limit invoice data quality in travel and expenses. Company processes are rarely designed with VAT recovery in mind, the travel and expense (T&E) process is fragmented by nature, and country rules keep evolving. You can read more in our first article on where recoverable VAT slips away, and our second article on how the travel policy shapes invoice quality upstream.

Practical steps to audit your VAT recovery on travel:

  • Audit invoice quality by vendor, by expense category, and by country
  • Check that invoices meet each country’s formal compliance rules for VAT recovery
  • Map where itemisation is missing on key categories like hotels, restaurants, and ground transportation
  • Identify the structural disconnects (process, systems, country rules) that limit your current recovery
  • Use that audit to size the recovery opportunity and prioritise where to fix first
Why itemising a hotel invoice matters
Example: France
Not itemised
Accommodation, breakfast, dinner, parkingOne line
✕ The safest treatment applies to the whole bill, so no VAT is recovered.
Itemised
AccommodationNot recoverable
BreakfastRecoverable
DinnerRecoverable
ParkingRecoverable
✓ The VAT on breakfast, dinner and parking is recovered.
Same stay, same rules. In France, accommodation for employees is not recoverable, but breakfast, dinner and parking are. Itemising is what turns lost VAT into recovered VAT.

How can travel expenses above and below the e-invoicing threshold be designed for?

E-invoicing is a structural change for travel and expense processes. In a growing number of jurisdictions worldwide, invoices are progressively becoming electronic, with structured data exchanged directly between systems. In parallel, e-reporting introduces a separate obligation: transmitting a defined set of transaction data to tax authorities, in some cases close to real time. The two mechanisms run side by side and apply differently depending on the transaction type.

For travel and expenses, this introduces a practical reality: you now have two separate flows to manage, and you need to design for both.

Below the country threshold, simplified invoices and receipts remain the norm. In France, for example, transactions below 150 euros can still be supported by a simplified invoice, such as a restaurant receipt or a small hotel bill, and your existing process for these expenses does not fundamentally change. E-reporting obligations may still apply to these transactions, depending on the country and the nature of the expense.

Above the threshold, things work differently: transactions come through as e-invoices flowing directly into your accounting system in structured form, ready for VAT assessment and processing. This is a big change for travel and expense teams used to receipt-based processes.

Both flows carry recoverable VAT.

Practical steps to design for the two flows:

  • Identify the e-invoicing threshold in each country where your organisation operates
  • Segment your current travel expenses against those thresholds to see what falls into each flow
Two flows under e-invoicing
Below the thresholde.g. under €150 in France
  • →Simplified invoice or receipt
  • →Existing process, broadly unchanged
  • →Still carries recoverable VAT
Above the thresholdstructured e-invoice
  • →Flows directly into accounting
  • →Structured data, ready for VAT assessment
  • →Recoverable VAT, captured earlier
Both flows carry recoverable VAT. Design your process for each.

Where do the data foundations of VAT recovery come from?

Data is the most important variable in VAT recovery. When your data is clean, structured, and connected across systems, VAT checks can take place earlier in the process.

Instead of handling VAT at the end of the expense cycle, you can address VAT as transactions occur, applying earlier, stronger controls across a broader set of travel and expense transactions.

Achieving this requires the right technology to connect travel booking, expense, and accounting systems, ensuring VAT-relevant data flows seamlessly from booking to accounting. AI supports this process by handling incomplete or unstructured data: extracting missing information, flagging non-compliant invoices with clear explanations, and identifying patterns across high volumes of transactions.

Start with data quality. Audit how data moves between booking, expense, and accounting systems to fix the gaps that prevent accurate capture of VAT-relevant fields.

Practical steps to build solid data foundations for VAT recovery:

  • Map how VAT-relevant data currently travels across booking, expense and accounting systems
  • Identify the points where information is lost or manually re-entered
  • Close the gaps with T&E and VAT management tools that connect your systems end-to-end

How can the VAT recovery opportunity that e-invoicing creates be captured?

E-invoicing is transforming what finance and tax teams receive: structured invoice data, flowing directly between systems and harmonised across vendors, replacing the fragmentation and incomplete information that have limited VAT recovery for years.

If you prepare for it, this means more recoverable VAT identified, faster validation cycles, and fewer claims weakened by data gaps. If you treat e-invoicing only as a compliance project, the same data improvement will still happen, but you will not capture the recovery upside.

Integrations between travel platforms such as Amadeus Cytric and VAT engines such as VAT4U enable end-to-end data flows: from booking to validation and VAT reclaim.

Practical steps to capture the e-invoicing opportunity:

  • Position e-invoicing as a VAT recovery initiative, not only as a compliance project
  • Bring procurement, finance, tax, IT, and travel into the design conversation from day one
  • Connect your travel, expense and VAT systems, allowing the structured e-invoicing data to flow seamlessly
  • Track VAT recovery performance before and after implementation to measure impact

From compliance obligation to recovery opportunity

VAT recovery on travel and expenses has long been limited by invoice data quality. E-invoicing changes that, by making structured, validated, harmonised data the new norm.

Organisations that approach the transition with VAT recovery in mind will be the ones that capture the full value.

Turn e-invoicing into recovered VAT

See how VAT4U and Amadeus Cytric work together to turn travel and expenses into recoverable VAT, end to end.

Discover VAT4U for Amadeus Cytric

Frequently asked questions

How does e-invoicing affect VAT recovery on travel and expenses?
E-invoicing changes the way invoice data is exchanged, validated, and reported. For travel and expenses, this introduces structured, electronic invoices for transactions above the country threshold, and maintains a receipt-based process for transactions below it. Both flows continue to carry recoverable VAT, but the data quality available for recovery improves significantly under the new regime.
What are the two flows of travel expenses under e-invoicing?
Below the country threshold (for example, 150 euros in France), travel expenses continue to be supported by simplified invoices or receipts, and the existing process remains broadly the same. Above the threshold, transactions shift to structured electronic invoices that flow directly into the company's accounting system. To maximise VAT recovery, it is essential to design processes that effectively manage both expense flows.
Where does VAT data quality on travel break down?
VAT recovery often breaks down at the invoice level before any VAT process even begins. Vendors may issue invoices that are non-compliant or missing key VAT-relevant information, limiting deductibility. In complex expense categories such as hotel invoices, multiple items (for example accommodation, meals, parking) are often combined despite being subject to different VAT rules. When invoices are not itemised, the recovery defaults to the most conservative treatment, leading to a loss in recoverable VAT.
Should finance and tax teams invest in data quality or in AI first?
Data quality first. Artificial intelligence (AI) compounds the quality of the underlying data, in either direction. Organisations with clean, connected data extract more value from AI. Investing in data foundations is the prerequisite for AI to deliver its full potential in VAT recovery.
How does technology support VAT recovery in the e-invoicing era?
Technology ensures that VAT-relevant data flows consistently across the travel, expense, and accounting systems, on both the small-transaction flow and the e-invoicing flow. Integrations between travel platforms such as Amadeus Cytric and VAT solutions like VAT4U allow finance and tax teams to validate VAT data, identify recoverable amounts, and prepare claims with the structured information that e-invoicing makes available. This is what turns the data quality upgrade into a measurable recovery outcome.

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