If you wish to begin a fresh business in a European country you then should open a business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and also should you end up paying vat more than once then you can also obtain a vat refund to recover your hard earned money vat number.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as being a way of collecting tax in a transparent manner while also plugging tax leaks. The process has become largely successful and this common way of charging tax on services and goods has facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in a eu vat state or country and start importing goods to your own country. You will however pay the suitable customs or excise duties and may also need to pay import vat according to the classification of the goods. However, once your taxable sales cross the vat threshold limit set by the particular eu country then you may need vat registration in becoming a vat registered trader or dealer. This will clear the path to get your own vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to your tax authorities. You’ll now truly be part of your eu vat system.
However, there are several benefits of remaining in the europa vat system. In case you have imported goods from a member vat country where vat was already charged you’ll be able to simply fill out the necessary vat form to claim a vat refund. Just 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 might not be in a position to learn almost allin regards to the latest eu vat rules it would be better when you allow an expert vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns in time as well as make sure that your vat refund applications are handled within the 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. The second is the lower vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you have paid vat in a foreign country then this is probably large amounts, and recovering this amount can easily reduce your costing and provide a much-needed financial injection into your new business check vat number.
Vat is really an efficient way to make sure that tax leakage is reduced in a seamless manner. You too should opt for starting a business in a very vat friendly european country whilst importing goods or services from a member country which also follows vat. By opening up a 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.