Australian businesses are leaving an estimated half a billion dollars in recoverable tax on the table each and every year, it has been claimed.
According to global tax reclamation firm VAT IT, businesses are entitled to reclaim foreign Value Added Tax (VAT) – effectively what Australians know as GST – on a range of expenses incurred overseas.
This can include accommodation, transport, food and drink while travelling abroad, as well as attendance and participation in professional conferences, trade shows and exhibitions.
But failing to claim these legitimate refunds is resulting in an estimated collective loss of some $500 million.
That figure comes from VAT IT’s estimate of a global pool of unclaimed funds of $20 billion.
The company noted that Australia has reciprocal tax agreements with a number of countries popular for business travel, including Canada, South Korea, Japan and most of Europe, allowing for such purchases and expenses to have the tax paid refunded.
The rate of VAT varies country-by-country and can sit as high as 25 per cent.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.