Systems and Procedures
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
Value-Added Tax (VAT) is a national sales tax on goods and services, which is levied by many countries around the world. The European Union (EU) offers refunds of VAT to foreign companies that travel to participating EU countries for business purposes. A total of 44 countries currently provide VAT refunds, among them all 28 EU member states. Applicable VAT rates vary from country to country and the tax is recognized under different names, include IVA (Italy), GST (Canada, Australia), MWST (Germany, Austria), TVA (France, Belgium), and MOMS (Scandinavia).
Depending on the country, VAT may be refunded on: hotels, restaurants, car rentals, parking, gasoline and diesel fuel, transportation within 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 Chart USA for common business expenses eligible for VAT refunds to companies based in the USA.
University travelers must participate in the VAT program by submitting their ORIGINAL receipts through SAP Concur so refunds can be pursued. Receipts that are based on OCONUS per diem are not reviewed for any other purpose.
Reclamation of VAT by travelers to European countries requires the traveler to retain and submit receipts. Eligible receipts must fit the following criteria:
At the time the traveler returns from a trip, they are required to settle their expenses per University Policy TR01 International Travel Policy. All travel expenditures (including those on the purchasing card) must be settled in SAP Concur no later than 60 days after the end of the trip (30 days if the travel is at the end of the fiscal year or if travel is charged to a restricted fund and is completed in the last month of the sponsored agreement). When completing a travel expense report, if a foreign country is entered in an itinerary or expense, or is pulled in by a purchasing card charge, an audit rule will take effect which displays the following exception message: "This report includes expenses that may be eligible for VAT Reclamation. Please print the VAT Transmittal Cover Sheet from the Print menu (Exhibit "A") and submit the specified receipts to Accounting Operations."
This will prompt the traveler (or delegate) to review the receipts and print the VAT Transmittal Cover Sheet from SAP Concur.
Important: Original receipts continue to be required for VAT reclamation submissions, including meal or lodging per diem expenses. Travelers need to be aware that submitting the original receipts for expenses which fall under the OCONUS per diems will not impact the amount of their reimbursement, even if the actual expenses are lower than the per diem. Also, the VAT original receipts which are not required for per diem purposes will NOT be scanned into SAP Concur.
Once the travel expense report is entered, the traveler (or delegate) should staple the required original receipts to the back of the VAT Transmittal Cover Sheet from SAP Concur and mail them to:
SAP Concur/ERS Support will continue to accumulate the VAT reclamations and submit them to our third-party collector. With this process in placed, SAP Concur Support will have the capacity to run reports from SAP Concur to locate any pending VAT reclamation and follow-up with the department for original receipts.
The third-party processor goes through the transmittal sheets and processes the receipts as necessary to comply with each country's submission requirements. The third-party processor acts on behalf of the University and performs all of the interactions with each country.
Any VAT refunds are sent from the country payable to the third-party. The third-party deducts its commission from the refunds and wires payments to Accounting Operations along with the details by report key/foreign drafts by PSU identifier.
When refunds, less processing fees, are received from the third-party processor, the funds will be credited back to the traveler's home business area. The Report Key number which appears on the cover sheet is the tracking number assigned to that specific VAT reclamation and will be used to match any refund received from the third-party processor. Accounting Operations will provide a report to the Financial Officers for the VAT reclamation included in their refund.
Violation of a financial policy and/or procedure should be reported to your supervisor, unit manager, Human Resources representative, and/or office responsible for the policy. Where those resources are inadequate, you may choose to make an anonymous report through the Penn State University hotline by calling 1-800-560-1637.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area. Audits relating to sponsored activities or other audits performed by external auditors may also be performed. The Financial Officer would also be responsible for working with the external auditor and/or a central university office related to these procedures.
University Records retention must be managed in accordance with Policy AD35 University Archives and Records Management, and records schedules approved by the Records Management Advisory Committee (RMAC), Office of General Counsel, and the Senior Vice President and Chief of Staff. These records retention schedules are derived from - or based upon - federal, state, and local statute or regulations, University Policy, industry standards, and business needs. All University Records must be maintained in such a manner so as to provide ease of access, establish a suitable audit trail for all transactions, and to be reviewed prior to disposition.
Upon expiration of the retention period, University Records must be disposed of via secure destruction or transfer of University Archives, unless an exception to the disposition process set forth below applies. If the disposition method for University Records states "Review by Archives" on the records retention schedule, the employees responsible for those records should consult the University Archivist for a final determination of disposition. For University Records that must be securely destroyed, units may arrange for shredding services by either contacting the Blue/White Shredding Program or the Inactive Records Center.
Exceptions to the disposition process are as follows:
To safeguard the privacy of individuals, records that contain Personally Identifiable Information (PII). as defined in University Policy AD53 Privacy Policy, or students records, as defined in University Policy AD11 Confidentiality of Student Records, must be destroyed beyond recover. For additional information regarding privacy and the protection of an individual's personal information, see Policy AD53 Privacy Policy.
Additional questions may be directed to the The Office of Records Management.
For questions, additional detail, or to request changes to this procedure, please contact the SAP Concur/ERS Support Team.
January 27, 2022