VALUE ADDED TAX VAT - 101 1
Raj Shah, President Sam Shah, Chief Operating Officer 2
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
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
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
VAT Simple Example A Sample 10% VAT, Foreign Country Farmer Baker Retailer Customer Grain Loaf Loaf 20c+2c 60c+6c $1+10c Collects 2 6 10 =18 Government Refunds (0) (2) (6)=(8) Net 2 4 4 =10 6
In USA - Sales Tax A Sample 10% Sales Tax Farmer Baker Retailer Customer Grain Loaf Loaf 20c 60c $1+10c Collects 10 Government 7
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
Entities Pay Significant VAT $s But fail to recover due to UNAWARENESS 9
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
VAT % Rates for all Countries that Refund to USA Entities: 11
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
Sample: Hotel Invoice $320 refund on a single invoice 13
Sample: Exhibition Invoice $18,000 refund on a single invoice 14
Research Invoice Example $5,300 refund on a single invoice 15
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 651645 1078453 4/30/2012 8078.4 GBP 1346.4 Gerard,'Mark 8078.4 70511000 8907 GA9 651645 1078452 4/30/2012 3672 GBP 612 Gerard,'Mark 3672 70511000 8907 AH2 613300 KCLR4302012 4/30/2012 11720.65 USD Manor,'Tom 11720.65 70511000 GA8 651645 1078412 4/30/2012 2160 GBP 432 Gerard,'Mark 2160 70511000 8920 FQ1 651645 1078492 4/30/2012 9363.6 GBP 1560.6 Gerard,'Mark 9363.6 70511000 GA9 GA9 651645 1078494 4/30/2012 18856 GBP 3771.2 Gerard,'Mark 18856 70511000 8920 FQ1 651645 1078506 4/30/2012 4642.38 GBP 773.73 Gerard,'Mark 4642.38 70511000 8907 AH2 651645 1078542 4/30/2012 6166.8 GBP 1027.8 Gerard,'Mark 6166.8 70511000 8907 AH2 651645 1078545 5/4/2012 597.78 GBP 99.63 Gerard,'Mark 597.78 70511000 GA9 651645 1078546 4/30/2012 8395.92 GBP 1399.32 Gerard,'Mark 8395.92 70511000 8907 AH2 651645 1078543 5/4/2012 432 GBP 72 Gerard,'Mark 432 70511000 8907 GA9 651645 1078541 5/4/2012 4233.6 GBP 705.6 Gerard,'Mark 4233.6 70511000 8907 AH2 656349 186305 4/30/2012 10470.98 USD Daly,'Liz 10470.98 70511000 FQ7 Alloc.'#1' Internal' Order' Number Alloc.'#1' Network' Number 633597 21100 4/30/2012 3640 USD Manor,'Tom 3640 70511000 R09 654158 53003372 5/7/2012 22318.96 EUR Manor,'Tom 22318.96 70511000 100081624/0008 100081624 8 Alloc.'#1' Network' Activity' Number Alloc.'#1' Cost' Center' Assignmen t Alloc.'#2' Amount 16
Sample Wire Transfer Report...to identify FX Expenses 17
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
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
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
VAT REFUND OPPORTUNITIES 21
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
VAT Recovery for some of University Clients: University Client 2009 2010 2011 Total US$ Georgetown University 75,139 51,360 24,250 150,749 Duke University 91,471 8,577 100,048 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 2,508 360 8,116 23
Case Examples: 24
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
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
95% Drop in UGA s VAT Recovery in the last 4 Years $83,251.04++ $81,152.92++ 200582008+ 200982012+ $4,418.38++ $3,931.93++ Submi2ed+ Refund+ 27
In Summary... Lets not leave any Money on the table... 28
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