Well-travelled IT pros pay too much tax

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

In an industry as well-travelled as IT, this amounts to millionsof dollars lost each year simply because IT professionals do notbother to recoup their money.

VAT Refund Director Geof Harland estimates Australian businessesleave behind a staggering A$2.6 billion (C$2.2 billion) each yearbecause organizations are unaware of the reimbursementprocesses.

IT professionals travelling to Europe for conferences, tradefairs, or similar events are forced to pay tax on registrationfees, hotels and other travel expenses in each country theyvisit.

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

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

“VAT is like an invisible tax and with business travel costsbecoming increasingly expensive, most people don’t realize thatthey are entitled to reclaim VAT and can therefore keep theirtravel costs down,” Harland said.

“From large corporations to sole-traders, every eligible refundentitlement is worth pursuing.”

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

Most organizations do not bother to get reimbursed because eachEuropean country has its own reclamation process which can makeclaims complicated, according to Harland.

“Let’s face it, the European taxation authorities do not have avested interest in making the rules uniform throughout, but onceyou know the systems, it’s quite easy for claimants to follow andof course highly beneficial to recoup your money,” he said.

Currently, it is the one-man band or smaller organization thatis more likely to seek out a refund with “apathy” stalling refundsby enterprises.

“I have been preparing refunds for 14 years and the pattern hasnever changed in this entire time; four out of five businesstravellers don’t even bother,” Harland said.

“It isn’t just Australia that is lax, the situation is the samein America, Canada and other countries.”