Well-travelled IT professionals miss out on tax refunds

Less than five percent of Australian enterprises bother to claim VAT (value-added tax) refunds after travelling to Europe each year.

In an industry as well-travelled as IT, this amounts to millions of dollars lost each year simply because IT professionals do not bother to recoup their money.

VAT Refund director Geof Harland estimates Australian businesses leave behind a staggering $2.6 billion each year because organizations are unaware of the reimbursement processes.

IT professionals travelling to Europe for conferences, trade fairs, or similar events are forced to pay tax on registration fees, hotels and other travel expenses in each country they visit.

It is similar to the 10 percent GST in Australia but is as high as 25 percent in Sweden or 17.5 percent in the United Kingdom (UK).

But this tax which is paid by Australian travellers in each country across Europe can be recovered if a claim submission is made by a specific deadline, usually within six months.

"VAT is like an invisible tax and with business travel costs becoming increasingly expensive, most people don't realise that they are entitled to reclaim VAT and can therefore keep their travel costs down," Harland said.

"From large corporations to sole-traders, every eligible refund entitlement is worth pursuing."

To be eligible to claim VAT, IT professionals need to have travelled in European countries, spent money on a legitimate business expense such as conference costs, accommodation, meals, or car rental and have kept the original receipts.

Most organizations do not bother to get reimbursed because each European country has its own reclamation process which can make claims complicated, according to Harland.

"Let's face it, the European taxation authorities do not have a vested interest in making the rules uniform throughout, but once you know the systems, it's quite easy for claimants to follow and of course highly beneficial to recoup your money," he said.

Currently, it is the one-man band or smaller organization that is more likelyt to seek out a refund with "apathy" stalling refunds by enterprises.

"I have been preparing refunds for 14 years and the pattern has never changed in this entire time; four out of five business travellers don't even bother," Harland said.

"It isn't just Australia that is lax, the situation is the same in America, Canada and other countries."

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