TTM International - VAT Refunds / Reclaim for Europe, Canada, Japan, South Korea

Germany Will Refund Travel Expenses Paid after December 31, 2000, German Court Reversal

Italy Refunds VAT to Travel Agencies for Direct Purchase of Travel Accomodations

Dutch VAT Rate Increased to 19%

Consumer Tax Refunds Available for South Korean Expenses

Original Invoices not Required for Canadian Hotel Visitor Rebate Program

Deadlines, Notes, FAQs (frequently asked questions), etc.

Welcome!

This Web page provides our clients, visitors and friends with an update of the latest VAT refund information and news. The information provided applies to companies that have commercial activities in Europe, Canada, Japan and South Korea. For information regarding visitor/tourist refunds of VAT on purchases, please visit our LINKS page.

We are also introducing our new Web site designed to provide a business opportunity for entrepreneurs, accounting and finance professionals, travel agencies, tradeshow organizers, and companies that want to prepare VAT refund claims internally. This new site can be found at www.VATCLAIM.com.

Please feel free to CONTACT US with any questions you have regarding VAT reclaim issues and we will be happy to respond in our Notes section. Thank you for your visit. We are looking forward to providing you with a comprehensive source for Value Added Tax reclaim advice.

Germany Will Refund Travel Expenses Paid after December 31, 1999, German Court Reversal

The German Supreme Court recently reversed a decision by the German tax office to stop refunding for travel expenses. The 16% MWST on travel expenses incurred after December 31, 1999 can be reclaimed if the correct name of the traveler and applicant company is shown on the invoice/receipt.

Refund claims are submitted for expenses based on the date that the expenses were paid rather than the date of the invoice. For example, if a tradeshow invoice was issued in December 2003 and paid in January 2004, the deadline for submitting the invoice for reclaim would be June 30, 2005, because that is the deadline for calendar year 2004 expenses. It does not matter when the actual tradeshow was held.

The German Bundesamt fur Finanzen has become increasingly stringent on the documentation requirements for a claim, and tends to apply the most strict interpretation of the the rules when reviewing a claim. Companies that intend to submit refund claims to Germany in the future should be very careful to have the vendor include the exact legal name of the applicant company, as well as the correct address, on every invoice. Claims may still be submitted for trade show expenses and professional services.

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Italy Refunds VAT to Travel Agencies for Direct Purchase of Travel Accomodations

The Italian Government recently issued a Procedure under which travel agencies may reclaim the Italian VAT paid for hotel and transporation costs they incur when they purchase travel accomodations directly from the supplier. This new procedure is primarily directed at tour operators and agencies that organize large travel groups, however, any travel agency may apply for a refund of the 20% Italian VAT. There are very specific refund procedures and travel agencies who wish to apply for a refund should contact TTM International to complete the necessary paperwork and meet the requirements BEFORE PAYING THE INVOICE.

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Dutch VAT Rate Increased to 19%

The Dutch tax rate will increase from 18.6% to 19% beginning January 1, 2001. The minimum tax rate established by the European Union is 15%, however, most member nations have implemented a rate that is much higher.

Original Invoices not Required for Canadian Hotel Visitor Rebate Program

Companies that submit GST refund applications for the Canadian Visitor Rebate Program do not need to include original hotel invoices with the claim. A copy of the invoice, however, is required. Claim documents will not be returned to the applicant .

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Consumer Tax Refunds Available for South Korea Expenses

South Korea initiated a refund scheme of its 10% Consumer Tax on January 1, 1999. TTM first submitted claims for 1998 expenses and several client companies have already received their refund. Claims may be submitted by companies that do not have a legal presence in South Korea. Expenses incurred during a calendar year must be submitted before June 30th of the following year, and the minimum claim amount is 300,000 Won (approximately $300).

Hotel receipts will be honored for a refund only if they contain a stamp that should be obtained at the main office of the hotel at the time of checkout. However, because of the efforts of TTM's South Korean affiliate, WorldWide VAT, hotel expenses will be acceptable and qualify for a refund of the tax without this stamp. For further information, please contact TTM at 800-624-9383 for further information.

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Deadlines, Notes, FAQs (frequently asked questions), etc.

Deadlines

The deadline for submitting refund claims for expenses in most European countries and South Korea is June 30, 2005. This deadline applies to any expenses that were incurred / dated between January 1, 2004 and December 31, 2004. The claim must be received by (not mailed by) the relevant tax office by June 30th.

Claims for a refund of Canadian GST/ TPS / HST/ TVH / TVQ must be submitted with one year of incurring the expense. Claims for a refund of the Consumption Tax in Japan must be submitted within two months of the applicant company's fiscal year end.

The deadline for submitting refund claims for British expenses (including Northern Ireland and Scotland) is December 31, 2005. This deadline applies to any expenses that were incurred / dated between July 1, 2004 and June 30, 2005. The claim must be received by (not mailed by) the British tax office by December 31st.

If your company intends to submit a claim for this deadline, be sure to forward your original receipts/invoices as soon as possible, or contact our offices at 800-624-9383, to schedule a data collection by our professional staff.

Reclaiming Consumption Tax in Japan

Japan will refund its 5% Consumption Tax to companies for travel (no refunds of tax on transportation costs), trade show and professional services. However, the tax is only refundable if some additional paperwork is completed and submitted to the Japanese tax office before the expense(s) is incurred. In addition, refund claims must be submitted for two years subsequent to the filing, even if the form is all zeros. Please contact our offices at 800-624-9383, for additional information or to request that the paperwork be prepared. Companies intending to visit or do business in Japan in the calendar year 2005 should consider completing the required paperwork before December 31, 2004.

FAQ

Can a nonprofit organization get VAT refunds?

Generally, most nonprofit organizations are excluded from the refund schemes of most countries. In order to qualify for a refund, the applicant must be conducting commercial activities in the country to which a claim is presented. However, some non-profits may be eligible for refunds, depending on the nature of the activities, organizational structure and country to which the claim is submitted.

What should I do if it is too close to the deadline to properly complete the claims process?

TTM recommends that your company prepare a refund claim and submit it to the appropriate tax office, regardless of whether all of the proper documentation has been accumulated. It is most important to meet the deadline. If the claim is incomplete, the tax officer will reject the claim. Then, the applicant company will have an additional time period to resubmit the complete documentation. However, if you allow the deadline to pass without submitting a claim, you loose the opportunity forever.

Notes

Specific procedures and restrictions for refund claims vary by country. For example, France, Switzerland and Japan require that a local fiscal representative submit the claim on behalf of the applicant. However, all countries require that the original invoices / receipts on which the VAT was charged, are included with the refund claim. In addition, all countries require that the claim is prepared in the country's native language.