In the VAT recovery process, different administrators, such as franchisee administrators and administrators of expert companies, have access to the pricing scheme. This helps them manage and calculate the fees they charge their clients when submitting VAT claims or performing other services.

You can find the pricing scheme in the Invoicing module by selecting "Manage Pricing" from the left-side menu.

Why is the Pricing Scheme Important?

When providing VAT recovery services, experts need a clear calculation of their fees. Depending on the type of contract with the client, fees can be calculated in various ways. Some common fee structures include:

• Per transaction: Fees are charged for each individual transaction.
• Per claim: Fees are charged based on each claim submitted for VAT recovery.
• Fixed fee: A set amount charged for services.
• Percentage of recovered VAT: A percentage fee based on the actual VAT amount recovered.
• Percentage of claimed VAT: A percentage fee based on the VAT amount claimed, regardless of the actual recovery.

Key Differences Between Claimed and Recovered VAT-Based Pricing

When charging based on the claimed VAT, fees are calculated once the claim is submitted to
the tax administration. However, not all claimed VAT may be recovered, meaning the actual
earnings might be uncertain.
Conversely, when charging based on the recovered VAT, fees are only calculated and billed
once the VAT is successfully recovered. This offers more predictability in terms of earnings and
is directly tied to the amount the client receives.

Types of Fees

• Fixed Fee: A set amount charged per expense or per claim. For instance, VAT experts may sign contracts where they charge a fixed amount for every expense booked.

• Variable Fee: This is typically a percentage of the claimed or recovered VAT. If it’s a large amount, a fee cap can apply to ensure the client isn’t charged an excessive percentage of very high amounts. For example, a cap might be set at €5,000 for any expense over a certain value.
  There can also be a minimum fee for very small claims, ensuring the work done is fairly compensated, even if the VAT recovery amount is low.

• Recurring Fee: A fee charged periodically (e.g., yearly, quarterly, monthly) for ongoing VAT recovery services. The period of invoicing and the start and end dates can be specified in the contract.

Customizable Pricing Options

Users can define the pricing scheme, making it easier to remember and communicate to clients. The description should indicate whether the fee is fixed, recurring, or variable, the basis for the calculation (expense or claim), and any caps or minimums involved.

The calculation basis can also vary:

• Approved amount: Charges based on the VAT amount approved by the tax authority.
• Claimed amount: Charges based on the initial amount claimed, regardless of whether
  it's recovered.
• Net amount: In cases involving VAT-exempt or zero-rated invoices, fees may be based on the net value of the invoice, since no VAT can be charged.

Advanced Price Calculation Rules

For large multinational clients with complex VAT recovery needs, advanced price calculation rules offer additional flexibility. For example, if recovering VAT from a country like Croatia is easier, a lower fee might be applied. Or, domestic VAT claims might incur different charges than claims under the 13th VAT Directive. You can see an example of different rules below:

These rules can be set to apply to specific countries, VAT flows, claim types, etc., and are triggered based on criteria such as the country of refund or type of VAT claim.

Nested Exceptions

Pricing rules can become even more specific with nested exceptions, where exceptions are layered on top of each other. For example, if a refund is being claimed in Italy, one rule might apply, but a different rule might apply if it's a domestic VAT refund within Italy. This allows for highly customized pricing based on specific scenarios.

To add a nested exception to the rule, simply create a new rule, input the necessary information, and then use the drag-and-drop feature to move it into the main rule:

Invoicing Currency

Clients also have the flexibility to specify the invoicing currency, ensuring that all billing is aligned with the local or preferred currency of the client.

Parallel Fees

Some clients have specific pricing requirements, often using advanced price calculation rules to define thresholds. In addition to these thresholds, they require certain fixed-price items to always be included in invoices. These may include claim handling fees, bank transfer fees, or other fixed charges that are part of their pricing structure.

To support this, we have introduced default fixed items in the pricing setup. When a pricing scheme is configured for a client, fixed items can be added, ensuring they automatically appear on every order and invoice. 

There are two descriptive fields:

• Description: e.g., “Bank Transfer Fees”
• Plan Description: A free-text field where clients can specify any details related to that fee.

Unit Pricing: Predefined per client, e.g., $4.50 for a transfer fee or $50 for a plan fee.

Quantity: Always put just one.