System Eases VAT Claims

<H1> System Eases VAT Claims</H1>By Cheryl Rosen

A new system from Corporate VAT Management simplifies filing for VAT reclaims by computerizing the job of filling in multiple forms in various languages.

Called Auto VAT, the system allows corporations to follow up on a hard-dollar opportunity by filing for refunds of value-added taxes of as much as 25 percent paid by their travelers in Europe.

VATs are national sales taxes, charged by many countries worldwide but refundable to foreign-based corporations. Like filing for a refund with the IRS, however, the process involves a discouraging amount of paperwork, including original receipts-and forms must be filed separately in each country and in its native language.

Many companies outsource the entire VAT reclaim process to third-party services, which keep as much as 50 percent of the refund. But Corporate VAT Management president John Powell suggests that corporations can garner 90 percent of the potential refunds by doing it themselves, and limiting their focus to "the Big Four" countries: the United Kingdom, Germany, Sweden and the Netherlands.

While the system will print out forms for other countries as well, Powell said that he is "trying to encourage corporations not to make inefficient choices by pursuing refunds in countries that do not offer much. The process in Italy, for example, takes five years; Spain denies refunds to U.S. companies; France doesn't give refunds for hotels," he said. "We encourage companies to just dig out the receipts that generate high-quality refunds, and to stick with the four countries where filing is the most cost-effective."

The Auto VAT system has a $1,000 annual maintenance fee and a one-time installation charge, which will be waived for customers that sign up by December. Corporate VAT Management offers a similar product for travel management companies which can offer VAT forms as a service to corporate customers.

Powell also plans to integrate Auto VAT with corporate expense-reporting systems, so that business travel buyers can generate both their VAT tax reports and their refund applications simultaneously.