European VAT (Value Added Tax) through its reclamation service.

Consulting Solutions says Bermuda companies tend to incur substantial VAT charges because of the high level of business travel by Bermuda-based companies staff.

Mr. Greg Vasic, a manager at Consulting Solutions, said reclaiming the charges is a logical way to minimise tax charges and will also be a new addition the Island's international business infrastructure.

"We think it's applicable to Bermuda...several US and Canadian companies are reclaiming the VAT,'' added Mr. Don Mackenzie, one of the founders of Consulting Solutions.

"Our clients include insurance companies and local financial institutions reclaiming the VAT for travel expenses, accounting services and a variety of other goods purchased in Europe,'' said Mr. Vasic.

"They approached us. Without the service we probably would not go through the hassle of documentation,'' commented Mr. Philip Simpson, vice president of Johnson and Higgins (Bermuda) Ltd. J&H does have employees traveling often in Europe and this service allows the company to "outsource the administration.

We have just sent our first batch of invoices (to Consulting Solutions),'' he said.

Up to now, the company did not attempt to reclaim the VAT, he added.

According to Mr. Vasic and his partners, an estimated $800 million is left in Europe yearly by corporations through unclaimed VAT and business travellers pay a VAT up to 25 percent on many goods and services like hotel rooms, meals, entertainment, car rentals, training and exhibition expenses.

VAT may also be charged on business services like professional fees for legal or accounting services, marketing expenses, and executive recruitment, and raw materials, manufactured components and commodities may attract VAT. Mr. Vasci said only a small portion of non-EC firms reclaim VAT due to the complexities of the process.

Reclamation can be convoluted because: Many countries require that claims be presented in the language of the country in which the tax was incurred; Many countries require VAT claims be processed by an EC-based country, each country has a different set of rules and procedures; and VAT reclamation timetables vary by country and deadlines must be met to obtain the refund.

"We handle all these complexities,'' added Mr. Vasic.

Mr. Vasic would not divulge how much commission Consulting Solutions receives, but did comment, "if a company does not try to get the VAT back, essentially they are paying 100 percent commission.'' Mr. Vasic, who is Canadian, noted non-Canadian residents may be familiar with the Goods and Services Tax rebate but there is no corporate GST reclamation for that tax.