As organizations based in the United States outline strategies to reach new audiences around the globe, hosting meetings and conferences outside US borders is an essential piece of success. Those face-to-face experiences create opportunities to connect with new members and emerge as a leader in an increasingly competitive global landscape. However, they can also create some serious challenges when it comes to three very important letters: VAT. Value Added Tax is applied to many goods and services at meetings. Meeting planners already have plenty of worries about on-site details, and VAT can easily add to that list of logistical concerns.
“Given the variance and complexity in VAT laws on a country-to-country basis, a meeting planner runs the risk of not recuperating the VAT to its full capacity and violating the local tax laws,” Marc Lieber, manager, US sales of global VAT management firm BC&A, says.
So just how much money might you be losing? Lieber says recent studies have shown that the majority of companies get back less than half of what they ultimately could recover.
“Many US-based entities have seen their VAT refund requests denied in countries such as Spain, Italy, Poland and Portugal,” Lieber says. “However, there are legal ways of recovering in these countries. Ultimately, VAT is recoverable in all countries of the EU.”
FREE DOWNLOAD: VAT Quick Tips Resource Guide
Where Your Meeting Is Located Can Make All The Difference
VAT rates can vary widely. Lieber says that rates in the EU can be as low as 15 percent to as high as 27 percent. While the rates change depending on the state, Lieber says there is one constant: they’re rising.
“The trend in past years has shown a gradual increase in these rates,” Lieber says. “Next year, Luxembourg and Portugal will raise their respective rates.”
On the opposite side, some countries are making conscious efforts to make VAT easier to understand.
“In an attempt to incentivize international planners, Mexico and Canada have simplified their tax laws with respect to meetings and events,” Lieber says.
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What Lies Ahead
Lieber says that VAT laws in the EU have undergone many changes, all of which must be implemented by 2015. All telecommunications, broadcasting and electronically supplied services made by EU suppliers will now be taxable where the customer is located. Until now, the rule has simply involved taxing where the supplier is located. While Lieber says that planners shouldn’t be drastically affected by the change, it is clear that AV suppliers will need to think about how and where they deliver services.
How To Update Your Education
No matter what role you play in the meetings industry, a basic knowledge of VAT laws is a very valuable asset. To help educate meeting planners on the ins and outs of VAT laws and costs, Lieber will host a free webinar on Wednesday, September 10 at 1 PM Central Standard Time with his BC&A colleague, Jean Francois Benard. Click here to register.