Do New VAT Rules Amount to a “Net Plus” or “Not Much” for U.S. Meeting Planners?

The European Union implemented changes to the Value-Added Tax system that were set to begin earlier this year. Now, says Christina Backman of Euro VAT Refund Inc. in Culver City, Calif., “the dust has settled … and it seems like most of the countries within the E.U. have implemented the new VAT rules in regards to meeting and events held in Europe.”

The biggest potential plus is that meeting planners will no longer have to register for VAT in the country where their meetings or events are taking place in order to get their VAT payments refunded. Rather, she says, “they will be able to submit a refund claim directly to the European Tax Authorities" for travel-related services such as hotel charges or for payments for participating in trade shows (as long as the booth space is not then re-sold).

She notes that this is not true in all cases and, of course, it only matters if the country is willing to refund VAT paid by U.S. companies. “Most Western European countries do refund the VAT to North American companies,” she says. However, Spain, Italy, Greece, and Portugal do not.

The other change that has a big impact on U.S. association planners is that “generally” VAT is no longer charged on all exhibit space and services. “Basically when the event planner sells the ‘raw space’ only, VAT should be charged to the exhibitor,” Backman explains. “However, if the planner is also charging for services—building the booth, cleaning, rental of furniture, et cetera—then VAT should not be charged. Each country does have different ways to determine what is defined as ‘services,’ so it is important to include VAT management at the planning stage.”

The bottom line is that you really don’t want to go it alone. Find a company that specializes in VAT reclaim to help you figure out which rules apply to your specific circumstances. “These are the very general new rules,” Backman says. “They vary from country to country within the EU. It is extremely important for the North American company and event planner to do research regarding the VAT rules at the planning stage.”

Find more at the Euro VAT Refund Inc. Web site.

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