Starting a new business inside of a vat enabled European State or country is only going to 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 ensure that your cost is kept at a minimum and that the problem of double taxation does not eat into your profits.
Several EU countries have embraced vat or value added tax over the past decade to ensure that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, amongst others have adapted vat and many countries in addition have moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to start a business in an EU country that has changed over to vat then appropriate comprehension of eu vat rules is required to keep a tight leash on your costs vies.
Any goods or services which you import in your country will attract customs or excise duties as well as import vat, based on its classification. In order to charge vat to your customers, you will also need to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. Now you can make a vat invoice inside your country and charge the applicable vat rates to the customers. You will also need to file regular vat returns determined by the sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods to your country where vat was already paid from the original country or used services in a country where vat may be paid you’ll be able to reclaim the vat amount. You are able to claim vat amount on goods where vat was already paid by applying for a 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 apply for a vat reclaim to recover the amount of vat paid.
The eu vat rates various eu countries range from 15 to 25%, while special vat rates on certain goods and services range from 1 to 6%. There are also certain goods that are vat exempt. These rates can easily make a huge difference in your product costs and when you are able to recover any tax which has already been paid then this can make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you. Make sure you look for an agent that only takes fees or commissions from vat amounts recovered rather than charging a flat fee vat control.
Many countries in Europe have opted for a uniform tax system on goods and services, and this is good news if you intend to begin a new business in that country. Your costing process becomes simpler and you’ll surely be able to recover vat amounts which may have been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from any financial shocks.