EU VAT refunds for U.S. companies

It’s that time of the year again – June 30 is coming right up. Two more weeks to submit your VAT refund in any EU country except the UK (they have odd refund deadlines).

EY has a nice and comprehensive overview – linked below.

A couple of additional notes:

  • You will need a Form IRS 6166 to show that you are a U.S. company registered with the IRS. This will take some time to acquire from the IRS. If you don’t have the form in hand, make sure to file the refund request without it to preserve the firm deadline, and submit the 6166 as soon as possible. Some countries accept this, other don’t.
  • Similarly, not all countries accept VAT refunds from U.S. based companies. Italy and Spain are the biggest culprits.
  • Don’t file for refunds that would expose you to a registration requirement. For example, if you purchased goods locally for onward local delivery, you will have incurred VAT on the purchase. If you request a VAT refund, the answer will be that you are liable for local VAT registration.

I do not file VAT refunds on clients’ behalf – that is too easy and you should be able to do that yourself. But I am always happy to help – let me know!

Download (PDF, 141KB)

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June 28: IPT’s annual conference in San Diego

As a rookie member I will attend the annual conference of the Institute of Professionals in Taxation (IPT), on June 28 in San Diego, CA.

The agenda is here: https://tinyurl.com/noy7skn
(sorry – had to shorten the web address)

I will be presented with the VAT Article of the Year – for more see here: http://www.us-vat.com/blog/?p=970. The article is in pdf below.

Let me know please if you are planning on attending as well – would love to meet up!

Download (PDF, Unknown)

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VAT audits and controversy revisited

Risk management and internal controls seem to be the flavors of the year – here is a “thought piece” by EY about managing VAT audits. As I mentioned before – this is nothing new, but good to see a comprehensive summary of do’s and dont’s.

EY discusses:

  • The nature of modern indirect tax audits and the rise of the electronic audit (e-audit)
  • Common errors and audit triggers as well as practical suggestions for reducing the risk of unexpected assessments, penalties and sanctions by actively preparing for tax and customs inspections
  • Ways in which taxpayers can avoid assessments and sanctions by removing uncertainty, preparing for audits and improving end-to-end compliance
  • How taxpayers can resolve disagreements with tax and customs authorities, both in and out of court

See here for the website (it is sometimes a bit challenging to read on my Chrome browser): https://webforms.ey.com/GL/en/Services/Tax/VAT–GST-and-other-sales-taxes/ey-managing-indirect-tax-controversy-home

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“VAT, the only answer that is a real answer”

Join me at this seminar featuring Professor Michael Graetz (Columbia Law School). He will speak in the Grand Hyatt in NYC on Wednesday, June 17, 2015.

Synopsis:

Representatives of large U.S. MNCs are pressing Congress to lower the corporate tax and exempt dividends received from foreign subsidiaries. Tech firms want to add a special low tax rate on innovation income to the list. Representatives of small businesses, notably the politically powerful NFIB, object to funding these changes by base broadening unless individual income tax rates—applicable to partnerships, LLCs, and subchapter S corporations—are also reduced significantly.

Democrats in Congress insist that these measures cannot be funded by cutting spending on health insurance, social security, food stamps, or assistance to needy families.

So while the direction of income tax reform is clear, paying for it currently seems impossible. There is, however, one clear path, one taken by more than 160 other countries around the world: enact a national tax on sales of goods and services. In fact, this may be the only way to overcome the current stalemate.

See http://www.internationaltaxinstitute.org/

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Back from Asia

In addition to my client work in Asia, I co-presented in Singapore at PWC’s Asia Pacific Tax Conference. The slides are below; raise your hand please if you have any questions!

The two week business trip to Singapore and Hong Kong went very well. Hong Kong to New York is a 16 hour flight, see http://www.cntraveler.com/galleries/2014-03-06/longest-flights-in-the-world/3, and was a somehow endless final of an otherwise successful trip.

Download (PDF, 646KB)

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GST in India – slowly getting there

The introduction of GST (Goods and Services Tax = similar to VAT) in India has been a long time coming. Over the past couple of months the discussions and negotiations have made good progress, and it seems that finally the GST will be introduced at some point next year.

India is developing their own knowledge of dealing with a federal GST – most states in India currently already have some form of GST or VAT, but a federal VAT is a new beast.

I enjoyed reading this criticism of a federal GST in The Hindu, called “GST: Good for business, snag for federalism?”. In this well-researched opinion piece the author discusses both the social and economical impact of a federal GST.

This article is also worth your while if you are (still) interested in the effects that a potential federal VAT in the U.S. may have.

Have a look here: http://www.thehindu.com/opinion/op-ed/gst-good-for-business-snag-for-federalism/article7279180.ece

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Puerto Rico: Let’s keep that sales tax a bit longer…

My friends from EY did a nice write-up on the recent non-changes in Puerto Rico, with a grossly misleading title: “Puerto Rico becomes first US jurisdiction to adopt VAT system”.

Not so fast! For now, the agreement is to increase the sales tax rate, and – with lots of luck – a VAT somewhere in the second or third quarter of next year.

I know that a number of you have been on the fence about what to do with the PR tax proposals. EY’s overview is worth your time.

https://webforms.ey.com/GL/en/Services/Tax/International-Tax/Alert–Puerto-Rico-becomes-first-US-jurisdiction-to-adopt-VAT-system

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