<< Blog

Claiming VAT in Horizon Europe projects – a guide for EU and Swiss partners


4th February 2025 at 11:56 am



Blog series 3/3: SERI reporting

How should Value Added Tax (VAT) be handled in Horizon Europe projects? In our previous blog post, The Swiss Guide to Horizon Europe financial reporting – EC versus SERI requirements, we discussed the key differences between reporting to the European Commission (EC) and the State Secretariat for Education, Research and Innovation (SERI). Here, we will provide guidance to VAT recovery for both EU-based Beneficiaries and Swiss Associated Partners involved in European research and innovation projects, ensuring accurate financial reporting and getting the most out of your project budget.

VAT is a tax paid on almost all goods and services by the purchaser. Private sector organisations, notably companies can reclaim deductible VAT from the national tax authorities. This is the case worldwide. However, in practice, SMEs and other entities usually only reclaim VAT in their country of residence because VAT paid outside requires a lot of bureaucracy which is typically avoided. Public institutions on the other hand cannot reclaim VAT (there might be exceptions).

Claiming VAT in Horizon Europe as a Beneficiary

Article 6.3 of the Horizon Europe Model Grant Agreement states that non-deductible VAT is an eligible cost in Horizon Europe projects. However, beneficiaries who can reclaim VAT from their national tax authorities cannot include these costs as eligible project costs, regardless of whether they claim the VAT refund. Conversely, beneficiaries who are not entitled to VAT recovery (such as public institutions) can claim VAT as an eligible project cost.

In the following specific circumstances, VAT is eligible in EU grants, including:

The key to handling VAT lies in determining its recoverability from national tax authorities. Consequently, VAT eligibility may differ between beneficiaries from different countries due to variations in national tax legislation. If you are unsure about how to handle your specific case, please refer to the EU-Grants – List of country specific issues or contact your National Contact Point (NCP).

Claiming VAT in in Horizon Europe as a Swiss Associated Partner

Swiss partners follow a similar procedure as EU beneficiaries but claim to SERI instead of the EU. In Switzerland, SERI funding is considered a subsidy and therefore not subject to VAT. However, all types of Swiss organisations can claim VAT on research costs from SERI if they cannot reclaim it from the Swiss tax authorities. It is important to note that this is not optional; if you can reclaim VAT from the Swiss tax authorities, you must do so. Only non-deductible VAT can thus be charged to the project and claimed from SERI. The table below summarises the VAT eligibility conditions for European and Swiss project partners.

VAT eligibility in HORIZONEC fundingSERI funding
Public institutions (not acting as a public authority)YesYes
Companies and other private-sector organisationsNo (deductible VAT)No (Swiss VAT)
Yes (Foreign VAT)

Additional considerations

  1. Thorough documentation is essential, including invoices, receipts, and accounting extracts. Both SERI and the EC have similar requirements in this area, and audits may be conducted. Separate project accounts are highly recommended to allocate and verify project-related expenses.
  2. While indirect costs are calculated using the 25% flat rate, it is crucial to remember that only eligible costs should be included in the base for this calculation. This ensures that non-eligible VAT, such as recoverable VAT, is not inadvertently included, which would result in double funding.
  3. Beneficiaries operating under a mixed VAT regime must follow specific procedures for VAT regularisation. A provisional deduction ratio is initially applied. At the end of the fiscal year, the final deduction ratio is determined. When closing accounts, VAT must be regularised. This involves adjusting the VAT costs declared in the grant for the difference between the provisional and final deduction ratios in the subsequent reporting period. In case a project partner receives a VAT refund after the final payment, they must inform the granting authority, which will recover the cost.

Financial project support at your service

As an experienced partner in dozens of Horizon Europe projects, we assist numerous project partners with managing complex financial aspects, including VAT. Our expertise in EC and SERI financial requirements and reporting ensures that your project finances are managed accurately and efficiently. We offer comprehensive support, including SERI report preparation, document review and expert advice on project finance and planning. For further information, please visit our dedicated web page or contact us directly to discuss your own specific needs.

Robin Vanneste

Robin Vanneste
Business & Finance Associate

Yannic Fechtig
Innovation & Digitalisation Associate

References:

Horizon Europe (HORIZON) Euratom Research and Training Programme (EURATOM) (2024, November 2). General Model Grant Agreement. https://ec.europa.eu/info/funding-tenders/opportunities/docs/2021-2027/common/agr-contr/general-mga_horizon-euratom_en.pdf

State Secretariat for Education, Research and Innovation SERI (v5, July 2025). Horizon Europe – Guidelines for financial reporting on SERI financed participation of Swiss partners in EU research framework programmes. https://www.sbfi.admin.ch/dam/sbfi/en/dokumente/2021/10/h-e-fin-web.pdf.download.pdf/heufinguide_e.pdf

Blog series 3/3: SERI reporting