VAT Isn’t Just a Finance Problem—It’s a Strategic One

Here’s how it works: Value-Added Tax (VAT) is applied throughout the EU on most goods and services—typically between 17–27%. That means every vendor invoice you get—from CRO services to packaging fees to depot storage—likely includes VAT.

If you don’t proactively manage VAT recovery, you’re eating that cost.

And here’s the kicker: it’s usually recoverable. But only if you’re structured properly and filing it right.

Where Biotechs Lose Money

This isn’t about malice—it’s about misalignment. Small and midsize sponsors often focus so heavily on study execution that indirect cost recovery gets sidelined. VAT ends up in the “too messy to fix” bucket.

Common pitfalls:

• No VAT registration in the countries where services are rendered

• Using third-party vendors who don’t provide compliant invoicing

• Misclassifying trial-related spend as non-recoverable

• Missing the filing window—each country has its own rules, deadlines, and formats

Without a cross-functional approach—Finance, Clinical Ops, and Supply Chain working together—VAT becomes just another line item instead of a strategic savings opportunity.

What Smart Sponsors Do Differently

You don’t need to be a tax expert. But you do need a system.

Here’s what effective sponsors build into their trial infrastructure:

• Early VAT planning during vendor contracting. Structure your agreements so VAT is visible, categorized, and tracked from day one.

• Use experienced partners—especially your depot or distribution vendor. Some offer VAT registration and filing services or have country-specific expertise.

• Set up country-specific VAT accounts if needed. Yes, this adds initial admin overhead—but it unlocks reclaim potential in high-spend markets like Germany, France, and the Netherlands.

• Track and audit invoices monthly. You don’t want to chase down year-old records. Use tools (or a central spreadsheet at minimum) to capture VAT across your vendor network.

The ROI Is Real—and Worth the Lift

Most biotech CFOs wouldn’t knowingly leave $200K in a vendor’s hands. But that’s exactly what happens when VAT is ignored. The average mid-size EU trial racks up VAT across multiple service tiers. When recovered properly, that money goes right back to your budget.

That’s real capital you can reinvest in sites, extend enrollment, or fund your next study milestone.

Final Takeaway

VAT isn’t just an accounting footnote—it’s a lever. One that forward-thinking sponsors are already pulling to offset rising trial costs. If you’re operating in the EU without a VAT recovery strategy, you’re leaking cash.

Build the system now. Partner with people who know how to navigate it. And make sure every euro spent on VAT has a chance to come back.