TTM International   is a Minnesota-based company which has provided Value Added Tax (VAT) refund claims preparation, management and advisory services to corporations throughout North America since 1993.  TTM's services are targeted toward companies doing business in Europe, Canada, South Korea and Japan, however, as other countries seek to comply with the reciprocity rules established by EU directives, refund opportunities will continue to expand.

InterTrade Service France (ITS)  was created by Mrs Brigitte Kervella in 1991 to cater to the needs of European companies wishing to have a business structure in France, while minimizing risks and investment.  its started providing key services such as fiscal representation and VAT refunds.   While resolving those issues, its built a strong reputation in the industry and realized that foreign companies entering France were facing complex and confusing situations: constant changes in tax laws, red tape quagmires, language barriers, difficulty managing local personnel.  This led its to develop other services and become an "outsourcing service provider" with a full range of support services, from payroll to litigation assistance, including tax and accounting management.


While VAT systems have been the primary source of revenue for most industrialized countries for decades, the ability of non-resident, non-registered companies to file a claim and receive a refund of these taxes assessed on business expenses is a relatively new phenomenon.  This extraordinary opportunity for companies throughout the world to obtain repayments of their VAT provides the basis for TTM and ITS' services.

The European Union (EU) ratified Directive 8 in the 1970s and later, Directive 13 in 1988, to establish a unified value added tax system.   These directives require that EU member states enact policies and procedures allowing non-resident businesses to recover the VAT paid on expenses, such as travel, professional services, tradeshows, and branch office expenses.  Because VAT rates within the EU are a minimum of 15% and can be as much as 25%, this refund potential can represent a significant source of cost reduction to a corporation.

In 1995, the European Union initiated a reciprocity rule, which requires that the home country of non-EU resident companies seeking VAT refunds also implement a VAT refund scheme.  Since this reciprocity requirement became effective, Japan, South Korea and Canada have started refund programs, and many others are in the process of developing VAT refund procedures.  Each year, additional countries begin refund programs, and inevitably, the expansion of VAT refund opportunities for companies throughout the world will continue.

Claim requirements vary from country to country and claims must be completed in the appropriate language and submitted to the respective country's tax authorities.  Therefore, few corporations, especially medium and small firms, elect to devote internal resources to the process.

TTM and ITS intend to capitalize on the complexity of claims processing, high revenue potential, and lack of established service providers to build a global network of independently owned and operated offices in order to penetrate new markets and service its existing client base.


Theoretical Basis for VAT Refunds - A VAT system consists of a progression of tax assessment on the "value" that is being added to a product over the course of its production.  This taxation is achieved by a system of debits and credits, or inputs and outputs, in tax terminology.

In these systems, VAT is charged on every sales transaction for all goods and services.  Therefore, a company which is located in a country with this form of tax, will incur VAT on all of its business expenses.  For example, its purchases of raw materials, office supplies, and professional fees, such as attorneys and accountants, will all include an assessment of VAT by the supplier.

Conversely, when it sells its products, the same company is also obligated to charge VAT on each sales transaction.  It will be collecting the tax on behalf of its government and eventually remit those funds to the tax authorities.

However, when the company is preparing to remit the tax it has collected on its sales, it is allowed to deduct, or take an input credit, for all of the tax that it has incurred on its business expenses.  In this way, it is only being taxed on the value that it has added to the product as it progresses along its production stream.

This system of taxation creates a trade barrier for its non-resident competitors.  The competitor may purchase goods or services within the tax jurisdiction and incur VAT.  However, as a non-resident, the company would not have a mechanism for taking credit for the tax it has paid on its expenses.  In this way, the non-resident company would be incurring greater production costs compared to its resident competitor.  The European scheme of allowing non-resident companies to apply for a refund of the VAT was implemented to reduce this trade barrier.


Products and Services - Our partners will provide data collection, claims preparation and VAT consultation that is targeted toward companies doing business in countries which offer VAT refunds. The European countries with the most liberal refund policies include the United Kingdom, Germany, the Netherlands, Sweden and Denmark.  All EU member countries, as well as Canada, Japan and South Korea, provide some refund potential, especially for tradeshow and convention expenses.  

And, as additional countries work to comply with the EU reciprocity rules, refund opportunities will continue to expand.  Other countries which compete directly with the EU, such as Brazil, Argentina and India, are expected to implement refund schemes in the near future.  For example, Hungary, Poland, and the Czech Republic, as well as newly accepted EU members (the Baltic states, etc.) are currently preparing procedures and policies for their refunding schemes.

Partners will collect the appropriate documentation for claims from client expense files, prepare claims for each country as applicable, respond to inquiries from the foreign tax offices on behalf of the client, track refunds and provide claims management reporting, including customized reporting based on cost centers, locations and other criterion.  

We have developed proprietary software for the preparation and tracking of VAT refund claims and have developed an extensive knowledge of the requirements for obtaining these refunds.  These systems provide its clients with a comprehensive control over the process to maximize the refund potential available and ensure that the client company is not inappropriately exposed to any unforseen tax liabilities.  A client's perception should be that the Partner's scope of services enhance the value of the product beyond just claims processing.

For its services, Partners charge a contingency fee, based on the actual amount of the refund received by the client.  TTM and ITS utilize the services of their partners in Japan and South Korea, to prepare and submit claims for these countries.  


Obstacles and Other Considerations - The complexity of claims processing has prevented the saturation of the marketplace by experienced and capable service providers.  Claims must be prepared in a variety of foreign languages and in compliance to the tax rules established by each country's tax authorities.  Any new supplier intending to enter the marketplace must spend an enormous amount of time and money to research these tax rules, develop systems and procedures for servicing clients, design computer software to process claims in languages with a variety of character sets, such as Korean, Japanese, Polish, and Hungarian, and be willing to wait several months to receive payment for services while the claims are being finalized in foreign tax offices.

A new service provider must be capable of evaluating the organizational structure of a corporation and also have the resources to implement claims processing systems and procedures for any new countries that may offer refund schemes in the future.  In addition to the initial systems implementation and product development, a new provider must consider the impact of maintaining client confidentiality and the integrity of the client's expense files and documentation.  Establishing methods of sales and marketing to high level corporate executives can also be a barrier to entering the industry, as well as establishing a pricing structure for services in order to minimize cash flow problems.

We have established a proven client servicing system for VAT claims processing which is incorporated into a comprehensive training system. This training system is designed to provide all of the education and support needed to become a successful provider of VAT refund claims processing services.

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