FOR travelling salesmen and executives returning from Europe, keeping those expense receipts could yield their companies big tax rebates from European Community governments. This is because Value Added Tax (VAT), which is commonplace across the EC, can be fully reclaimed by business travellers. Ranging from six per cent to 25 per cent, VAT is levied on goods and services at the point of sale, and covers most expenses that the international business traveller is likely to incur on a European trip. Operating a sort of VAT bounty-hunter service, Meridian Reclaim Services is part of a burgeoning industry which chases the tax through the Euro-bureaucracy in return for a finder's fee. Present the company with a wad of receipts and the next thing you receive is a cheque for your refund, minus a 20 per cent charge, according to the Hong Kong managing director of Meridian, Don Sniegowski. During 1993, the company claims to have liberated US$200 million (HK$1.5 billion) from government exchequers, returning it to companies from across the world which do business in the EC. Meridian's Hong Kong office has been operating for a year and already has 300 companies on its client list, with big names like Hongkong Telecom, CITIC, Joyce Boutique and Hongkong Land already willing converts to the idea of ''money for nothing''. That, according to Mr Sniegowski, is the beauty of the service, since all the risk is taken by the recovery agent which only gets paid once the errant tax is returned. Apart from normal expense items, companies are also eligible to claim VAT paid on professional and consultancy fees, as well as exhibitions and trade shows. For a big corporate client, the bill could reach HK$2 million in a single year, while Meridian would look to pull in $200,000 for a large-sized trading company, said Mr Sniegowski. Companies which really want to get serious about VAT can employ a swat team of Meridian auditors who will wade through warehouses and turn out filing cabinets in search of extra savings. Mr Sniegowski believed an audit could increase the refund by up to four times. The final amount recovered depends on the rate at which the tax is originally charged and, more importantly, the efficiency of the particular EC government in coughing up. Italy is said to be notably retentive when it comes to refunds, while Mr Sniegowski said Germany and Britain were returning most to Hong Kong companies, followed closely by The Netherlands.
