In general, businesses can claim back VAT on goods and services that are purchased for business use, provided they are VAT-registered. However, for a business to claim back VAT on its own services, the transaction must be genuine and not a mere internal transfer or sale of services to itself. For example, if a company has multiple branches or divisions and one division provides services to another at a cost that includes VAT, then the purchasing division may be able to reclaim the VAT paid as long as it is for legitimate business purposes and proper VAT invoices are issued.
It is important to keep adequate records and ensure all transactions are clearly documented to withstand scrutiny by tax authorities. Transactions that appear artificial or contrived to receive VAT refunds without a real exchange of goods or services could lead to challenges from tax authorities and potential penalties. Businesses should consult with a tax professional or adviser to assess their specific circumstances and ensure compliance with local VAT rules and regulations.