Value Added Tax (VAT) and Goods and Services Tax (GST)

• Typically non-U.S. consumption taxes imposed on sales of goods by businesses at each stage of production and distribution
  • For purposes of the VAT (Value Added Tax) or GST (Goods and Services Tax); the term "business" includes any activity carried on, whether for-profit or not-for-profit, that involves or is intended to involve the sale of property or services.
• VAT and GST are also imposed on sales of services as they are rendered.
• VAT and GST is a tax on consumer expenditures, and in theory should not fall on business activities.
  • This is achieved by the input/output system. When a business operating in a VAT/GST country buys goods or services it pays tax to the supplier, which is called an input tax. When the same business sells goods or services, whether to another business or to a final consumer, it is required to charge tax, which is called an output tax. The business then must periodically total the input tax and deduct it from the output tax, paying the excess output tax to the government agency responsible for collecting it.
  • IEEE, in most cases, is not subject to these taxes, but in situations where IEEE is sponsoring an IEEE conference in a VAT/GST assessing country, they are required to register to collect VAT/GST on sales of conference admissions and other product sales.
  • The tax that they collect is called an output tax, but any of the VAT/GST tax that they paid to vendors in that country (input tax) can be deducted from the output tax owed to the governmental agency.
  • In a country that requires registration for IEEE conferences, the determination if you have to register is based on where the services are performed. If the services are performed in the VAT/GST country, regardless if the registration fees are collected in the U.S., then the conference is required to register and collect these taxes.

• IEEE conferences are required to register and collect VAT/GST, must also have a periodic reporting of the tax to the government.
• Many conference Treasurers and Conference Committees use VAT/GST tax vendors to administer the process, for which they charge a flat fee or a percentage of the tax collected.
• You can obtain VAT/GST vendors from local in-country directories or accounting firms.
  • In the event one cannot be found, please contact the IEEE tax department for a referral.

• In the event a conference is held in Europe, in 2009, all such conferences will be required to use the new VAT Reporting System that has been designed by the IEEE Conference Group, the IEEE Tax Dept. and Deloitte and Touche, CPAs.  
• Conference activities in Europe must be processed through the newly organized Limited Liability Company, IEEE International LLC, which is currently being registered for VAT in most European Countries.
• If you are organizing a conference in Europe, please contact the Meeting and Conference Group for more information on this subject.

Please contact the IEEE Tax Department for current updated information when planning a non-European IEEE Conference or other event that may require the registration of VAT/GST taxes: tax-compliance@ieee.org.