Articles written for meeting planners about recovering value-added tax, or VAT, paid for international meetings and conventions are usually pretty short. That’s because the process is complex, subject to change, and different depending upon your meeting country and where your organization is based.
The advice is therefore short and sweet: Call an expert.
We’re saying essentially the same thing this time around, but we’ve also got a case study from Martin Pinsonnault of TaxPort International (an example of one of the afore-mentioned experts), to take you through the variables at play. “Some meeting planners tend to consider only the question of VAT refund when in actual fact the whole matter of compliance with local legislation is a must,” Pisonnault notes.
First, A Few Basics
1. Most countries of the world, except for the United States, have implemented VAT. Current rates range from 5 percent to 27 percent. (Other acronyms include GST, which stands for Goods and Services Tax; and IVA/IGV, which stand for the Spanish impuesto al valor agregado/impuesto general a las ventas.)
2. Mexico markets its possibility not to charge VAT for inbound international meetings as a logistical and budgetary benefit for planners.
3. VAT paid for incentive conferences is generally not refundable. However, popular incentive destination Monaco does allow refunds under certain circumstances on incentive expenditures (including refunds of French VAT paid for itineraries that extend to the French Riviera).
4. Some countries simply do not refund VAT to U.S. organizations at all. It’s worth checking rates and policies during your site selection process or at least before signing afor a specific destination.
5. The time to contact a VAT expert is before or during the site selection process. If your organization is required to charge VAT, then registration is required prior to issuing invoices and should therefore be dealt with well in advance of the event.