What is Recoverable Tax?
- A tax is recoverable if you can deduct the tax you paid to other businesses from the tax you collect from your customers.
- If you buy something for your business, you pay tax on your purchase. You can deduct this tax from the tax you collect from your customers.
- For example, if you pay €1 in tax on a purchase for your business, and collect €5 in tax from your own sales, you would owe the government €4.
What is Non-Recoverable Tax?
- A tax is non-recoverable if you must remit the full amount you've collected from customers, regardless of what you may have paid.
- If you buy something for your business, you pay tax on your purchase. This tax cannot be deducted from the tax you collect from your customers.
- For example, if you pay €1 in tax on a purchase for your business, and collect €5 in tax from your own sales, you would owe the government the full €5.
