Value-Added Tax

Value-Added Tax (VAT) is a national sales tax on goods and services that is levied by many countries around the world. In 1987, the European Union (EU) began offering refunds of VAT to foreign companies that travel to participating EU countries for business purposes. University employees who travel to these countries must participate in the VAT program.

The following countries refund VAT to foreign companies as a business and investment incentive:

Austria
Belgium
Denmark
Finland
France
Germany
Ireland
Italy
Luxembourg
Netherlands
Sweden
Switzerland
United Kingdom

VAT rates in the participating countries currently range from 6.5 percent to 25 percent, depending on the country. Some countries do not refund the full amount levied. Depending on the country, VAT may be refunded on: hotels, restaurants, car rentals, parking, gasoline, diesel fuel, transportation within the country, business entertainment, telecommunications, conferences, trade shows, training courses, and professional fees. Certain VAT is not refundable, such as on alcohol and laundry services. See the VAT Reclaim Parameters for a summary of the expenses that can be reclaimed.

Participating in the VAT Program

University travelers must participate in the VAT program by submitting their receipts so refunds can be pursued. Receipts that are based on O-CONUS per diem are not reviewed for any other purpose.

A third party processes the necessary documentation on behalf of the University to recover VAT. The third party returns net recovered VAT to the University, and the money is then returned to the departmental budget that incurred the charge.

What You Need to Do:

1. Collect original receipts.


2. Complete the Value-Added Tax Reclamation Receipt Transmittal cover sheet.


3. Attach the receipts to the cover sheet, and send to the address indicated on the cover sheet.

Related Procedures

Reimbursement of Lodging, Meals, and Incidental Expenses for O-CONUS Travel

Value-Added Tax Reclamation

Marriott Hotel Government Rate Policy

Marriott Hotels has changed its policy regarding those who are entitled to book the government rate at their family of brands, which includes, Marriott, Courtyard by Marriott, Fairfield Inn, Residence Inn, Renaissance, Townplace Suites, and Springhill Suites. This change occurred in 2007 but was never communicated directly to us.  Only U.S. and Canadian Federal Government employees, active duty U.S. and Canadian military personnel, and employees of Federally Funded Research and Development Centers (FFRDC's) will be eligible for Federal Government per diem rates at Marriott brands throughout North America.  State and Local Government employees will be eligible for State and Local Govrnment per diem rates.  Cost Reimbursable Contractors (CRCs) will not be eligible for Marriott's government rates.  Penn State is viewed as a CRC.

Travelers booking a government rate will be required to provide one of the following forms of ID at time of reservation and/or check-in.

For Federal Government Per Diem Rates:

•    Federally issued personnel badge or ID card (with official travel order document in hand)
•    Common Access Card (CAC Card)
•    SmartPay Credit Card
•    Active military personnel badge or ID card (with official travel order document in hand)
•    FFRDC identification card (with official travel order document in hand)
•    Travel orders
• ]  Canadian government or military issued ID or credit card

For State and Local Government Per Diem Rates:

•    State or Local government issued personnel badge or ID card (with official travel order document in hand)
•    Travel orders on original state or local government letterhead

No other forms of ID will be accepted.

Choice Hotels Policy Change

Choice Hotels' family of brands which includes Quality Inns, Comfort Inns, Clarion Collection, Comfort Suites, Econo Lodge Hotels, Cambria Suites, Rodeway Inns, Sleep Inns, Mainstay Suites, Flag Hotels and Suburban Hotels, has also changed it's government rate policy and is no longer extending their government per diem rate to Cost Reimbursable Contractors (CRCs).

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Purchasing Airline Tickets with a Purchasing Card

If your department has migrated to the Employee Reimbursement System you are eligible to purchase travel with your purchasing card. However, even if you previously used your purchasing card for airline tickets, before you can now use the purchasing card for travel you must take the purchasing card test and sign the document acknowledging your responsibility for the charges on the card to have your purchasing card limits established. This process can take up to a week to be updated in the PNC system before the card can be used for travel. If you have not re-taken the test and signed the document, you can no longer use the purchasing card for travel. Please be certain you have established your purchasing card for travel before booking on Travelport with the purchasing card. Should you book after hours and the card is not valid, the ticket will not issue and you run the risk of loosing a fare.

Club Quarters

As a reminder to our travelers, Penn State has a volume requirement to meet at the various Club Quarters properties where we receive discounted rates. Because we did not meet our volume committment at the property in Chicago, our rates in Chicago have increased $20/night. The new rates are being posted on the Travel Services website. Please consider Club Quarters when possible for your travel needs. They offer Penn State a very competitive rate in cities where demand and pricing are high. However, if we do not support our agreement with Club Quarters, we are at risk of loosing these very compeitive corporate rates.

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