VALUE ADDED TAX VAT - 101

Transcription

1 VALUE ADDED TAX VAT

2 Raj Shah, President Sam Shah, Chief Operating Officer 2

3 Key Objectives... What is VAT Which Countries refund VAT, on What type of expenses How can you get your VAT $ back Anything Else...from your side? 3

4 US SALES TAX Assessed only on goods, not on services generally. Only paid by the end user(business or private person) Is a cost to the business when it has to be paid U.s. is almost the only country which has Sales Tax instead of VAT. 4

5 Value-Added Tax (VAT) Consumption tax is added to most goods and services in all the levels of the supply chain Is almost never a cost to the business Is a cost to the private person There is no exemption (unlike in US for State Entities) - Everyone has to pay VAT 5

6 VAT Simple Example A Sample 10% VAT, Foreign Country Farmer Baker Retailer Customer Grain Loaf Loaf 20c+2c 60c+6c $1+10c Collects =18 Government Refunds (0) (2) (6)=(8) Net =10 6

7 In USA - Sales Tax A Sample 10% Sales Tax Farmer Baker Retailer Customer Grain Loaf Loaf 20c 60c $1+10c Collects 10 Government 7

8 What happens in certain foreign transaction: Buyer in One country & Seller in Another Buyer Seller US Entity will have to pay VAT, but can reclaim full or part of VAT from certain foreign tax authority - VAT Refund 8

9 Entities Pay Significant VAT $s But fail to recover due to UNAWARENESS 9

10 VAT % Rates for Select Countries that Refund 25% 25% 18% 19% 19.6% 20% 21% 10% 10% 5% Japan Austrl. S. Kor. Spain Germany France UK Italy Sweden Denmark 10

11 VAT % Rates for all Countries that Refund to USA Entities: 11

12 VAT Can Be Refunded on the following Travel Expenses Meeting Expenses Professional Fees Many Others: Hotels/ Housing Car Rentals Transportation Meals Banquet, etc Seminar Conferences Training Trade Shows Theater Tickets Legal Acctg./Tax Marktg/ Adv. Research Related Exp. Study Abroad Oxford Program (Building) Program Dir. Expenses Site Visits 12

13 Sample: Hotel Invoice $320 refund on a single invoice 13

14 Sample: Exhibition Invoice $18,000 refund on a single invoice 14

15 Research Invoice Example $5,300 refund on a single invoice 15

16 Sample AP Report...to identify FX payments Vendor' Number Invoice'Number Invoice'Date Invoice'Total' Amount Invoice' Currency VAT'8' Amount' Approved Sales'Tax'8' Amount' Approved Alloc.'#1' Amount Alloc.'#1'GL' Account' Number Alloc.'#1' Cost'Center Final'Approver /30/ GBP Gerard,'Mark GA /30/ GBP 612 Gerard,'Mark AH KCLR /30/ USD Manor,'Tom GA /30/ GBP 432 Gerard,'Mark FQ /30/ GBP Gerard,'Mark GA9 GA /30/ GBP Gerard,'Mark FQ /30/ GBP Gerard,'Mark AH /30/ GBP Gerard,'Mark AH /4/ GBP Gerard,'Mark GA /30/ GBP Gerard,'Mark AH /4/ GBP 72 Gerard,'Mark GA /4/ GBP Gerard,'Mark AH /30/ USD Daly,'Liz FQ7 Alloc.'#1' Internal' Order' Number Alloc.'#1' Network' Number /30/ USD Manor,'Tom R /7/ EUR Manor,'Tom / Alloc.'#1' Network' Activity' Number Alloc.'#1' Cost' Center' Assignmen t Alloc.'#2' Amount 16

17 Sample Wire Transfer Report...to identify FX Expenses 17

18 3 Key Documents Required to Recover VAT on your Corporate Expenses 1. Original Invoice From foreign supplier Indicating VAT Rate, VAT Amount and VAT # Full Description of product or services provided Fax not acceptable, Org. invoice returned with the Refund 2. Proof of Payment* Check Copy WIre Transfer Confirmation, etc 3. Certificate of US Tax Residency 18

19 Reclaim Filing Six Months after the fiscal Year-End UK: Fiscal Year July-June Deadline - by Dec 31 EU & Other Countries: Fiscal Year Jan-Dec Deadline - by Jun 30 No Extensions to file Missed deadline = Lost refund 19

20 In Summary VAT Is a Value Added Tax on Goods/ Services levied in many countries, primarily European countries. Can be as high as 25%. Is fully or partially refundable to foreign entities. 20

21 VAT REFUND OPPORTUNITIES 21

22 Some of our University Clients Emory Northwestern Stanford Duke Auburn Uni of Delaware Indiana Uni of Chicago UCLA BYU Ga Tech State Uni of NY 22

23 VAT Recovery for some of University Clients: University Client Total US$ Georgetown University 75,139 51,360 24, ,749 Duke University 91,471 8, ,048 Northwestern University 18,634 9,454 21,045 49,133 Emory University 6,371 16,095 20,238 42,704 A"COMMENT"FROM"A" TYPICAL"SATISFIED" CLIENT:" Upon"receiving"a" significantly"large"refund" on"4/4/2009,"katherine" Bellows,"International" Director"for"Georgetown" University"sent"a"note" saying:"this"is"great" news!"thank"you"so" much"for"all"of"your"hard" work!!"" University of Illinois 3,443 9,002 23,544 35,988 University at Albany, SUNY 23,120 23,120 University of Wisconsin, System 4,675 8,712 8,849 22,236 University of North Carolina 15,858 1,749 3,543 21,150 Brigham Young University 4,749 5,531 10,531 20,812 Utah University 1,142 8,343 8,556 18,041 Georgia Institute of Technology 4,339 6,376 6,641 17,355 Auburn University 1,066 2,552 11,991 15,608 Louisiana State University 6,852 5,724 12,577 Carleton College 4,903 4,940 9,843 University of Washington 3,768 5,963 9,731 University of Chicago 5,249 2, ,116 23

24 Case Examples: 24

25 UGA Study Abroad Participation # of Students 2500" 2000" 1500" 1000" Mul.ple/Unknown" Middle"East" La.n"Amer/Carib/N"Amer" Europe" Australia/New"Zealand" Asia" Africa" 500" 0" 2005&06" 2006&07" 2007&08" 2008&09" 2009&10" 2010&11" 25

26 University of Georgia - Some Study Abroad Programs eligible for VAT: Austria/Germany.Terry.Travels.2Business.in.Europe. UK. Croatia. Croatia.Maymester.Abroad. UK. Aberystwyth.University.Exchange,.United. Kingdom.(Wales). Art.and.Gardens.of.Italy,.France,.England,. Scotland,.and.Ireland. France. Cannes.Film.Festival.Study.Abroad,.France. UK. College.of.Education.Study.Abroad.in.Scotland. France. France. Cannes.Lions.Advertising.Festival.Study.Abroad,. France. French.and.European.Agricultural.and. Environmental.Sciences.Study.Abroad. UK. UK. Georgia/Ohio.State.Law.at.Oxford.2.Spring. Semester. London.Study.Abroad.Program2FACS. France. Millennial.Landscapes.of.Southwestern.France. UK. Social.Issues.in.Northern.Ireland. France. UGA.a.Paris,.France. UK. Study.Abroad.in.Britain.and.Ireland. Germany. Field.Experience.in.Health.Promotion,.Germany. UK. Theatre.and.Film.Studies.in.London. Germany. Freiburg.Study.Abroad. UK. UGA.at.Oxford.2.Franklin.(Summer,.Spring.or.Fall. term). Germany. SSG.Internship.Program,.Germany. UK. UGA.at.Oxford.2.Grady.(Summer). Japan. Daito.Bunka.Exchange,.Japan. UK. UGA.at.Oxford.2.SPIA.(Spring). Japan. TXMI.Tokyo:.Study.Tour.in.Textiles,. Merchandising,.and.Interiors. UK. UGA.at.Oxford.2.Terry.(Summer). Japan/Korea. Globis/Asian.Study.Abroad.Program. UK. UGA.at.Oxford.Junemester.(Summer). Netherlands. Switzerland. UGA.Terry.College.2.Maastricht.Univ.School.of. Business.&.Economics.Exchange. Georgia.Law.Summer.Program.in.Brussels.&. Geneva. UK. UGA.en.France. UK/Switzerland. Studies.Abroad.Europe. 1 26

27 95% Drop in UGA s VAT Recovery in the last 4 Years $83, $81, $4, $3, Submi2ed+ Refund+ 27

28 In Summary... Lets not leave any Money on the table... 28

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