VAT: Are You Throwing Away Money?
If a company sends employees to Europe or Canada, it may be able to claim hefty refunds of value-added taxes. One VAT specialist estimates that U.S. corporations are missing out on some $800 million in unclaimed refunds each year.
While tourists can file for VAT refunds only on goods they purchase and take out of a country, companies can reclaim taxes on hotels, rental cars, gas, meals, train tickets, even fees for staging trade shows, hiring local consultants, and retaining lawyers. But the rules can be daunting. For one thing, rates vary between countries and categories (hotel VAT is 6 percent in the Netherlands, 16 percent in Germany, 25 percent in Denmark). Also, the kinds of eligible taxes vary (car-rental VAT is refundable in Belgium and Spain, but not in France or Portugal).
There are companies that specialize in helping corporations make claims; they generally charge a percentage of the refund. Some worth checking out: VAT Recovery (201/934-6701; www.vrc-vatrefund.com); TaxZone (800/663-3150; www.taxzone.com); International Sales Tax Refund (716/284-6287; www.insatax.com); and Corporate VAT Management (206/292-0300; www.corporatevat.com), which also sells software ($995$3,500 for an annual license) that lets companies generate and file their own applications.