Citi Commercial Cards in late April announced a collaboration with payment service provider Fexco to help corporate card customers recover value-added taxes on travel expenses.
Citi clients will be able to outsource VAT reclamation services to Fexco for such business expenses as hotels, meals, car rental, conferences and exhibitions. Clients must supply original invoices and support documentation for foreign VAT payments, according to the companies.
"Businesses throughout the world should be aware and take advantage of their foreign VAT reclamation entitlements on employee business travel costs," according to Kathleen O'Connor, managing director of Fexco VAT Refunds Limited. "The services we are providing in conjunction with Citi Commercial Card will allow customers to do so in an easy-to-use way."
Fexco will offer Citi clients outsourcing services for expense report audits and back-office processing.
The Kerry, Ireland-based Fexco's VAT Refunds Limited said it has issued refunds to more than 30,000 companies worldwide during its 16 years in the business. "Fexco offers a consistent service across the globe, which provides an opportunity for our clients to realize greater efficiencies in their expense management process," said Chris Mason, Citi's head of commercial cards in Europe, the Middle East and Africa.
Because of the labor involved and the variety of tax systems operating worldwide, VAT recovery has been a difficult area for corporations to get a handle on. More, however, are outsourcing it as a wider variety of options become available to them. For example, several expense management tool suppliers, including CyberShift's Necho, Concur and its recently acquired Gelco Expense Management have tailored tools to address VAT reclamation and other multinational reporting issues
(BTNonline, July 17, 2006).Europe began refunding VAT to U.S. companies in 1989. Traditionally, larger companies have had the resources to take advantage of those refunds, but it has become more common for midmarket companies as automated tools become available. Rolls-Royce North America, for example, reported it reclaimed 27.4 percent of its VAT expense through its expense auditing services
(BTNonline, Feb. 5, 2007).