Global VAT Reclaim - An opportunity missed by Indian & Asian Business Travel buyers?
Recoverable Global VAT Reclaim can constitute up to 20% of your company’s overseas T&E spends in designated countries. Surprisingly there is limited understanding & negligible focus on recovery of this significant expense category in India and Asian countries…… Why??
Global VAT Reclaim is today the single largest saving’s opportunity inherent in Asian & India business travel programs that has yet to be fully exploited.
ProKonsul represents Taxback International, Ireland. Taxback is one of the world’s largest processors of Vat Reclaim and an app center partner of SAP Concur. Their seamless integration with SAP Concur delivers unmatched technical and operational convenience to enterprise customers.
While domestic VAT reclaim on travel-related expenses are still largely recovered, Global VAT recovery is largely ignored or swept under the carpet!
There are many reasons for this inertia
- A lack of recognition of this extremely important cost-saving opportunity amongst the corporate & travel leadership
- KPI’s of the business travel buyers/managers do not recognize this as a primary deliverable
- Absence of clarity on who owns this activity – business travel operations/ procurement/ finance/ accounts payable. As a result, the ball falls between the cracks as no one takes ownership!
- The travel management company’s & BT MICE agencies lack understanding and hence do not educate their clients on this opportunity.
Indian & Asian buyers need to engage an independent business travel consultant like ProKonsul, who can link the dots and help facilitate recovery of such significant savings inherent in their business travel program.
1. How much money is at stake?
Generally, Western Europe has the highest rates of VAT with rates going up to 27%. Overall VAT rates vary between 5% - 27%, depending on the country in question.
A simple way to calculate your potential Global VAT reclaims
Total spend on international air ticketing to the designated countries $100,000 p.a.
Your overall reclaim potential - 20% of your air travel spend US$20,000 p.a.
The reclaim potential will vary with the destinations to which your employees travel …. More travel to Western Europe will mean higher potential recoveries being possible.
That's a very handsome income generation by a traditional cost center like business travel …. Wouldn’t this be music to your CFO’s ears?
2. What is the scope of the opportunity?
When a company resident in India / Asia sends its employees overseas to designated countries in Europe/ Americas and Asia, they are legally entitled to recover the VAT component of expenses that their employees incur overseas during travel on expense categories.
Additionally, there are some direct corporate overseas spending that is also eligible for recovery.
The countries from which you can claim is dependent on the country in which your company is a resident. If a company pays tax in a given country and can prove this through a tax residency certificate, it is deemed to have residency in that country.
Important - This enterprise VAT reclaim is very different from the individual VAT reclaim that travelers may do to recover VAT on certain purchases overseas at airports.
The eligible expense categories for Global VAT Reclaim can be segmented into three broad groupings
A. Business Travel-related expenses
- Accommodation of any type
- Meals & Business Entertainment
- Fuel Taxi & Transport
B. Expenses related to overseas marketing & BT MICE
- Participation in Conferences/ Exhibitions/ Trade Fairs
- BT MICE groups that are sent overseas for education, training, incentives, etc
- Marketing & advertising
- Printing and stationary
C. Direct corporate expenses overseas
- Expenses for professionals appointed overseas - lawyers/ consultants/ advisors/venture capital firms etc.
- Inter-Company charges
- Account payable invoices
3. How easy is it to recover Global VAT?
All you need to recover your overseas Global VAT is to call ProKonsul. We will need
- Your tax residency certificate
- Original invoices
That's it !!
If you don’t have the original invoices or invoices in the correct format, don’t fret - ProKonsul & Taxback International will arrange an invoice retrieval & correction service so the maximum number of eligible invoices can be filed for recovery.
If you work with SAP Concur, life becomes even simpler due to the seamless integration that SAP Concur has with Taxback International. This allows for a no-obligation no-fees VAT Reclaim assessment & eventually simplified reclaim filing process.
Further, there are no upfront fees payable !!!
The customers’ liability for fee payment arises only when a successful VAT Reclaim is processed in their favor, by the tax authorities of the respective countries.
We will handle the processing, invoice retrieval, and correction, filing of paperwork with the respective country tax authorities. Normally it can take between 90-180 days for the process with the tax authorities to complete.
4. So …………What are you waiting for?
Act now to exploit this massive saving opportunity inherent in your program.
VAT Reclaim’s are governed by strict annual deadlines, which if missed will mean that your entire reclaim becomes void.
Further, if your claims are structured, claims can be filed every quarter which means that there is a regular inflow of cash from this activity.
For business travel buyers in India & Asia, this is the single most important way for their corporate leadership to take notice of their ability to positively contribute to the company’s P&L and profits …..
What better way to build a positive perception of the business travel team within your company?
Act now, recover your Global VAT reclaim, today !!
Want to setup your 30 minute FREE consultation with a ProKonsul business travel expert?
Drop us an email [email protected] or call +91-9873196115.
We would love to work with you! Call us now !!
ProKonsul ® optimizes the business travel lifecycle of its clients. It deliver’s domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consulting firm in India, Asia & emerging markets. We are located in Gurgaon, India
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