Paid and Unpaid. Two binders on desk in the office.
getty
Running a business is hard enough without chasing unpaid invoices or handling customers who walk away from contracts early. Beyond the immediate hit to cash flow, there’s a less visible risk that catches many companies off guard: value-added tax, or VAT.
VAT is meant to be neutral. Businesses collect it from customers and pass it on to governments. But when customers don’t pay or walk away from a deal, the reality can look very different. Companies can end up remitting VAT on revenue they never actually receive, turning what should be a consumer tax into a direct cost for the business.
VAT on Unpaid Invoices and Bad Debt Relief
In most countries, businesses account for…