The service recipient must verify that the service provider is registered with the Labor Authority to claim a credit for the VAT paid for specialized services. The service recipient must also obtain from the service provider a copy of the provider’s VAT tax returns and wire transfer demonstrating the remittance of the VAT to the tax authorities.
Because the VAT return includes information on an aggregate basis and not necessarily on a project or client-by-client basis, the service recipient may have to conduct a reconciliation to show that the VAT related to a specific project or client is included in the amounts reported and remitted to the tax authorities.
Source: EY
