# Is VAT deductible?



## GeneM

I finding conflicting information but most sources seem to indicate one can deduct VAT or sales tax from gross income for US returns. Is this correct? If so are there any special rules and how does one provide the evidence?


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## Bevdeforges

Not as far as I know. But let's clarify what we're talking about here.

For personal tax returns, no, you can't deduct VAT paid to a foreign government. If you itemize your deductions you can choose to deduct either state income taxes paid or state sales taxes - but not both. Sales Tax Deduction Calculator

For business returns, VAT is treated as part of your "necessary and ordinary" expenses of running a business and so is deductible in determining your business income for the year.
Cheers,
Bev


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## BBCWatcher

I agree with Bev. Note that any deductible or excludable expenses on personal income tax returns -- the Foreign Housing Exclusion, for example -- can be VAT inclusive. But VAT is not generally deductible/excludable.


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