| What
is VAT ?
VAT, or value added tax, is a common reference to an indirect
tax system.One practical difference between the direct and indirect
method of taxation is that the tax paid during the course of
doing business in an indirect tax jurisdiction may be recoverable.
The US is alone in North America in its use of a direct tax
system. The US is likewise in the minority of soverign taxing
authorities in its use of a direct taxation system.
What VAT expenses can be recovered ?
Typical business expenses that qualify for VAT refunds
are:
marketing and advertising, trade show costs, convention costs,
business travel costs, equipment import costs, professional
fees, machinery, office equipment and telephone charges.
Why should
VAT recovery be a business priority ?
US companies currently reclaim only a fraction of the billions
of dollars they pay in indirect tax. Since many companies account
for VAT expenses by booking them as costs, the real impact of
effective VAT management is overlooked. Any US company expecting
to compete effectively in an indirect tax jurisdiction will
need to carefully manage indirect tax recovery. With indirect
tax rates as high as 25% in some jurisdictions the need to recognize
and ultimately recover all eligible credits should be a business
priority.
What type of documentation is needed to support a refund
claim ?
Original receipts are required for filing claims for qualifying
goods and servics. Original import documents are likewise required
for in import VAT reclaim. Proof of registration as a US taxpayer
( IRS form 6166 ) and a power of attorney granting authority
to process your VAT recovery claim are also required.
What countries
allow VAT refunds ?
The majority of countries allow indirect tax refunds. All the
countries in the European community allow refunds as do the
tax authorities of Canada, Croatia, Czech Republic, Estonia,
Hungary, Iceland, Japan, Lichtenstein, Norway, Slovenia, South
Africa, South Korea, Turkey and Switzerland.
What services
does VATCAT offer?
1. Analyze current VAT operation.
2. Present a plan to optimize VAT management by lowering output-VAT
and increasing input-VAT.
3. Identify and verify the necessary documents.
4. Prepare and file forms and documents with the remitting
tax authority.
5. Return original receipts.
6. Deliver the foreign government's refund personally
to the U.S. taxpayer.
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