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Don’t let the hassle factor stop you from recovering eligible foreign VAT for your clients
Why is it that reclaiming eligible foreign VAT (in a similar fashion to the routine filing of BAS/GST returns) is something that many business either don’t know about, or overlook completely? The answer is surprisingly simple – it’s the hassle factor.
Australian businesses are entitled to reclaim significant amounts of VAT paid in across the UK, Europe and other countries where Australia has a reciprocal tax treaty, on regular business travel expenses including hotels & accommodation, transport, food and other services such as trade shows or exhibitions.
It’s sounds simple, but the process is challenging. What categories of spend are eligible for recovery, what are the applicable rates, and when and in what format claims can be lodged can all vary by country. To successfully recover the foreign VAT for your clients which they have incurred from international business trips therefore takes time, effort and a degree of expert knowledge.
Whilst larger businesses may have in-house expertise, for many smaller or medium sized organisations the effort required does not appear to match the possible return. This is why so often the money is foregone: written off to expenses rather than recovered back into the business as much needed operating cash.
ICB members will quickly appreciate that with European VAT rates often over 20%, and with VAT eligible to be recovered across many categories of business travel expense, if your clients businesses have even modest business travel expenses, they could stand to recover significant amounts. Add to this that VAT can generally be recovered for prior year expenditure, and suddenly the potential recovery could be of material value.
The challenge remains of how to overcome the practical and expert knowledge barriers to even start the process? The use of third-party providers to manage such specialist processes is increasingly common, and in the world of foreign VAT reclaim, VAT IT are the global market leaders. They specialise in global indirect tax recovery – and nothing else.
VAT IT provide the specialisation and technology to make the VAT recovery claim process as simple as possible. All that is required to start the process is some data related to your clients international business travel expenses. VAT IT provide a ‘no recovery, no fee’ service, taking on the risk of claiming on behalf of your clients. If there is no VAT to recover, then there is no cost incurred. It’s a win-win as VAT IT only charge a percentage of successful claims.
Concierge Travel Group are VAT IT’s business development partner in Australia – so please contact Stephen Pearse at email@example.com