Starting a new business in a vat enabled European State or country will only bear fruit if you confirm all european vat rules before importing goods into that EU State. This move
will help you to legally exploit all avenues to make sure that your cost is kept at the very least and therefore the problem of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or vat over the past decade to ensure that trading between such countries proceeds on a common platform. Countries such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, amongst others have adapted vat and most countries in addition have shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to begin a business in a EU country which has changed over to vat then appropriate knowledge of eu vat rules is mandatory for keeping a tight leash on your own costs.
Any goods or services that you import in your country will attract customs or excise duties as well as import vat, based on its classification. To be able to charge vat to your customers, you’ll need to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. You can now come up with a vat invoice inside your country and charge the applicable vat rates to your customers. Additionally, you will need to file regular vat returns based on the sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods into your country where vat has already been paid from the original country or have used services in a country where vat may be paid you’ll be able to reclaim the vat amount. You can claim vat amount on goods where vat has already been paid by applying for your vat refund in the original country. In the event you or your employees have attended trade shows or paid vat on some other services in another country, then you can still file for a vat reclaim to recuperate the amount of vat paid.
The european vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There’s also certain goods that are vat exempt. These rates can easily make a huge difference in the product costs and if you can recover any tax which has previously been paid then this can make a positive influence on your business bottom-line. An experienced and trusted vat agent can surely help you. You should look for an agent that only takes fees or commissions from vat amounts recovered rather than charging a flat fee.
Many countries in Europe have chose a uniform tax system on products or services, and this is good news if you intend to begin a new business in that country. Your costing process will become simpler and you’ll surely have the ability to recover vat amounts that have already been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State so as to defend your fledgling business from the financial shocks.