Why you should choose to avoid headaches when you deduct your expenses ?
The European law has substantially reduced deductions and created limitations on incentive travel. While incentive travel is usually conducted merely for entertainment rather than education purposes, the days of pure incentive travel are gone, according to Travel Market Report. There is a tendency to integrate ‘meeting content’ in the incentive travel business, as a result of EU regulations that make expenses more difficult to recover when it comes to ‘incentive travel’.
Your meetings need a clear business goal – A number of restrictions have been introduced by the European law, due to economic challenges and intense scrutiny of the meetings industry. More than ever, as a meeting and event planner you need to stay updated with regulations, work with the best VAT specialists and budget accordingly. With the new regulations it becomes harder to take back taxes for incentive trips, while for business meetings it is easier. Once you prove that your meetings have a clear business goal, it might be less complicated to recover your expenses and make savings for your business. More organizations are now combining the two – incentive travels and corporate meetings – merely for tax reasons, stresses a research done by Incentive Research Foundation.
Leisure activities increase deduction problems – In most of the European countries, leisure activities are not refundable. Therefore, as a meeting and travel planner you must be able to prepare some serious documentation and paperwork, as you need to prove a clear business goal for your meetings. For conventions, seminars and other meetings abroad, travel is deductible as long as you submit documents that show the followings: the number of days of the trip, the number of hours in each day you devoted to business, as well as a program of scheduled with your business activities during the meetings. As a general rule, documents that are detailing the trip and show a business purpose are very useful when it comes to reimbursements.
Keep safe agendas and programs – The line between business and pleasure gets blurred in the meetings and events industry. As such, there is an obvious need to show a clear goal of educating, enhancing networking and motivating your participants. Among the documents that you might need to stress your events business purpose, tax specialists name agendas, programs, per-meeting materials. A solid documentations and paperwork will always increase your chances to get the expected deductions.
In UK, France, Germany, Norway deductions run easily For tax purposes, meetings and travel planners should pay special attention to documents and receipts. When the purpose of the meeting is pleasure, not business – the expenses are not easily deductible, especially for corporations that have to comply with more strict regulations. The country where the meetings and events take place is also important, as rules are different from country to country. In the UK, France, Germany, Norway, deductions run easily, since they are less bureaucratic. However, even these countries have strict regulations on what constitutes a ‘business meeting’ and an ‘incentive event’, in which VAT is not usually refundable. European tax authorities usually refund VAT, if half of the day is spent on actual meetings, with the remaining half engaged in leisure activities. It is good to know that they will usually refund half of the VAT. It is also worth mentioning that some companies are not aware of the funds they can get from the reimbursements or they just give up due to bureaucracy, long waiting terms and unclear regulations. However, these costs are worth recovering, since they can bring substantial savings to your company. Approximately 5 billion euro are lost, annually, as companies do not take action in recovering their taxes. Although incentive travel is a topic that stirs debates, it is worth remembering authorities that the meeting industry creates 2.4 million jobs, according to Incentive Research Foundation. Popular destinations for incentive travel Italy Greece Spain Portugal Popular destinations for corporate meetings Germany Belgium UK Ireland Switzerland
This is a guest post by Mihaela Tudorica. Mihaela is an inbound marketing content creator at Azavista, a company specialized on event management software, based in Amsterdam. She is focused on blogging and marketing offers. Before Azavista, Mihaela attended University of Amsterdam, where she studied “Social media and digital culture”. Her areas of interest are websites, social platforms and search engine optimization (SEO). Mihaela works for Azavista. a web-based event management platform that provides planners with all the essentials to more efficiently handle their meetings and events. With Azavista, from just one consolidated interface, you can handle event registrations, email marketing, budgeting, supplier procurement and more. Azavista also offers a native event app, as well as an advanced analytics solution and VAT refund services especially for the travel and event industry.