TAX RETURN One cultural (and financial) difference that U.S. planners should factor in to their offshore-event plans is the value-added tax (VAT). Sometimes reaching 27 percent, it is imposed on most goods and services in Europe and around the world. It is often charged on hotel, venue, food and drink, professional fees, car rental, and other conference-related services. What’s more, the percentage varies from country to country, and so do the rules of how the tax is levied. Te good news is that many foreign tax systems often allow for a refund of the VAT to nonresident busi- ness entities, which means that U.S. companies can get a hefty share of the expenses back. “Tere is generally no reason VAT paid in Europe, Japan,
and Australia should be absorbed as a cost by your company,” says Britta Eriksson, president of Euro VAT Refund Inc., which works with many U.S. companies holding meetings and events abroad. Eriksson urges planners to consider local taxation rules as early as possible in the event planning process, because it is much easier to recover the VAT if the company follows the right procedures from the get-go, rather than trying to patch things together later.
STEPS TO SUCCESS First, keep in mind that incentive trips and related services are generally not eligible for VAT reimbursement. Once you’ve determined your event’s eligibility, check to
see if your potential destination refunds to the U.S–some of the countries that do include Austria, Belgium, France, Germany Ireland, Scandinavia, the Netherlands, and the United Kingdom. Next, check to see if your company needs to register for VAT
before it begins to collect any registration fees. Registration usu- ally is not required for events where no fees are collected. Finally, since expense reporting processes may vary from
country to country, learn about the invoice requirements before signing contracts with vendors and venues.
THINK GLOBAL, ACT LOCAL Recently, the European Union introduced a new set of VAT rules that apply to the meetings and events industry with the idea of simplifying the process and making its member countries more attractive to global planners. Te result is that many vendors now charge VAT on fewer services and items, which can translate to substantial savings. However, different countries can have their own interpretations. “For trade shows in Germany, for example, if an exhibitor
purchases more than three services, no VAT is charged,” Eriks- son says. “But in the UK, you don’t have to charge VAT if the services included in the price of the booth were more than 70 percent. Te rules can be unclear, and some tax authorities, such as in Italy, haven’t fully decided yet what conference services are subject to VAT.” Tat’s one reason why local expertise is imperative to getting
your money back. A good place to start the research may be local CVBs, destination marketing associations, as well as groups on LinkedIn or other professional resources where you can find experts who have held a meeting in the desired destination in the past year.
“There is generally no reason VAT paid in Europe, Japan, and
Australia should be absorbed as a cost by your company.”
ASK AN EXPERT “Get professional help with VAT and don’t try to do it yourself,” says Arbuckle with MeetingTracks. “I try to remember that my core function is planning the event. Outsourcing some functions is a reasonable move. We get help with transportation, we hire caterers, we go to an expert to get insurance for our meetings, and getting help from a tax expert is an item I keep on that list.” Nabeel Hasany, budget manager for Rotary International, takes this a step further and for every international destination hires a local tax consultant who can help navigate the laws and also obtain a tax ruling from the local authorities, if necessary. He says, “Te best-case scenario is when local authorities can waive the taxes on revenue, such as the registration fees, and ex- penses. Te worst is double taxation when you have to pay taxes on
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