VAT Savings: Does the Advertising & Marketing Industry Take Real Advantage of VAT systems?

2 May 2019
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It’s no secret the demands on the advertising and marketing industry grows exponentially every year. Clients want a personable digital voice that breaks through the noise, the demand for colossal captivating activations grows every year and the need to expand service offerings and stretching into incentive trips and MICE-related services are not uncommon today.

For the finance department of an advertising or marketing firm, this means complexities within their VAT reclaim and inputs both on a foreign basis and even more so domestically.

VAT recovery and compliance can often be overlooked or unattended to because of a lack of resource, understanding and infrastructure. But there are many areas that your business can increase it’s VAT yield and improve compliance within advertising and marketing’s nature of expenses.

Depending on the contractual structure between your firm and your client, there are areas within the advertising & marketing world where VAT can be reclaimed both locally and on overseas expenses:

1. On-site or away activations or shoots

Should an activation, filming, photoshoot, event or installation be held overseas, the VAT both on stand rental and all related costs are claimable. The foreign hotel stays for your employees is also claimable. On a local level, any travel and accommodation expenses are claimable too and while you may be inputting your A/P and travel expenses through your local return, it’s worth noting if you are adhering correctly to your local VAT laws.

2. Crossover into the MICE space

There is an increasing cross-over between marketing companies and the MICE (Meetings, Incentives, Conferences and Events) industry. Marketing companies are often taking on the responsibility of helping their clients to arrange incentive trips, conferences and events of all kinds both locally and overseas. And the VAT incurred on these expenses can stack up into the hundreds thousands and can be fully refunded.

3. Foreign VAT opportunities for the Advertising and Marketing Industry

Should your business be doing a lot of overseas travel, eventing and business abroad, your company is entitled to claim back the foreign VAT incurred in overseas jurisdictions across Europe and Australasia. From hotel spend to foreign supplier goods and services, your business can be refunded up to 25% of your foreign costs by simply looking into the opportunity.

4. Domestic VAT Compliance for the Advertising and Marketing Industry

We have found that 27% of local businesses believe they are being VAT compliant when transmitting their local returns but are not achieving 100% compliancy. This leads to overclaiming on non-claimable expenses and the increasing risk of vat authority penalties and unwanted audits. Ensuring your business is 100% VAT compliant while still finding opportunities to increase local VAT savings should be top of mind for any Financial Director.

About VAT IT

VAT IT assists over 12,000 international corporate clients from fortune 500 multinationals to SME start-ups. We assist companies to reclaim foreign VAT and achieve local VAT registration and compliance in 117 countries.

Our technology-driven solutions and premium service model removes all administration burden on your finance team so that all you have to do is sit back and wait for your refunds while being safe in the knowledge that all your claims are 100% compliant.

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