If you want to start a fresh small business in any European country you then should open a small business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and even should you find yourself paying vat more than once then you can certainly also apply for a vat refund to recover your money vat registration.
Through the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as a way of collecting tax in a very transparent manner whilst plugging tax leaks. The process has become largely successful and also this common method of charging tax on services and goods has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can begin a new business in any eu vat state or country and start importing goods into your own country. You’ll however be charged the appropriate customs or excise duties and might need to pay import vat according to the classification of the goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will likely clear the path to get your personal vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to the tax authorities. You’ll now truly be a part of your eu vat system.
However, there are many benefits of staying in the europa vat system. In case you have imported goods originating from a member vat country where vat has already been charged then you can simply complete the required vat form to claim a vat refund. In case you or your staff have paid vat during trade shows or on any other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you may not be in a position to learn almost all about the latest eu vat rules it will be better when you allow a specialist vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns in time and also ensure that your vat refund applications are handled well within time limit. Most countries in Europe which have adopted vat normally have 3 vat rates. The first is the normal vat rate of about 15 to 25% on most goods. Second is the reduced vat rate of about 1 to 6% on specific goods while the third is goods that are vat exempt. If you have paid vat in a foreign country then this is certainly large amounts, and recovering this amount can easily reduce your costing and provide a much-needed financial injection to your new business vat number.
Vat is truly an efficient solution to ensure that tax leakage is reduced in a very seamless manner. You too should opt for starting a business in a vat friendly european country whilst importing goods or services from a member country that also follows vat. By opening up a small business in a eu vat state you can certainly retain control of your costs while plugging your own revenue leaks on services or goods where vat has already been charged.