Value Added Tax (VAT), which is known by many different names around the world, is among the most confounding elements of international exhibiting. Depending on the country and the items imported or purchased, it can add 30 percent or more to an international exhibiting program's costs. However, exhibitors may be able to get back some or all of the VAT they paid. Here are 11 multiple-choice questions that will test your knowledge of VAT regulations. By Cynthya Porter
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1. What is the commonly accepted definition of Value Added Tax (VAT) and similar programs called by various names?
a. A sales tax collected at each stage of distribution for the amount of value added by that supplier.
b. A tax charged only to foreigners.
c. A tax charged on food, hotels, rental cars, and store-bought items.
d. A tax collected that is completely refundable to visitors.
2. Which country has no VAT system and no way for foreign companies or individuals to get refunds on the taxes they pay, but has more than 10,000 taxing jurisdictions for visitors to navigate?
a. United States
3. Which country has a VAT category that can require a tax of up to 300 percent of an item's stated value?
c. South Africa
4. What European country has the highest VAT, levied at 27 percent?
5. Which country currently has no VAT system but plans to introduce one shortly?
a. United Arab Emirates
b. Saudi Arabia
d. All of the above
6. What country recently announced it will let U.S. businesses recover VAT on costs for hotels and meals, as long as the expenses are associated with trade show participation?
b. United Arab Emirates
7. What rule does the European Union's 13th Directive establish for member countries?
a. Countries may refuse refunds to businesses from countries they don't like, including the United States.
b. Countries may set different minimum and maximum VAT rates depending on a visitor's country of origin.
c. Countries may refuse refunds to businesses from countries that don't offer VAT-refund reciprocity, including the United States.
d. Countries must treat the United States as a member of the European Union for VAT purposes.
8. What's the approximate value of VAT refunds that the European Commission estimates is left unclaimed every year in the countries belonging to the European Union?
a. $20 million
b. $20 billion
c. $200 million
d. $2 billion
9. For what reason would a government refund VAT that had been paid to it?
a. It wants tourists to spend more money.
b. VAT on some items is intended to be collected from residents or businesses established in that country.
c. Mistakes are often made regarding how much VAT is due.
d. It made wartime treaties with other governments.
10. What is the four-letter acronym for Sweden's VAT-equivalent system?
11. Of the 196 or so countries in the world, how many levy a VAT-type tax on purchases and/or imported products as of the beginning of 2014?