Most European Union countries have slowly switched over to VAT or value added tax on goods and services, and in order to abide by a standard code all eu countries that follow vat have to follow vat eu directives. These directives are amended regularly in a bid to help optimize the system in order to avoid tax leaks and make sure better co-operation among member countries in collecting and refunding vat.
The European countries through its website ec.europa.eu tries to educate states and vat registered traders in various countries on some of the regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly shifted to the system of vat tax in a bid to improve tax revenues and also to plug tax holes https://vatvalidation.com/vat which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but are almost similar in principle.
For example, in the United Kingdom a trader that has crossed over the vat threshold limit will need to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected by the trader is then adjusted against any vat paid and the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues connected to customs duties, excise and vat in the United Kingdom. Similarly, a trader in Poland would have to issue a faktura invoice, which essence is a vat invoice but in Polish language, and pay vat to the relevant vat department in the country.
Since each country has adopted vat in a slightly different manner through the use of varying vat rates to similar products, traders all over Europe usually have to hire a vat agent or vat consultant to help file vat returns regularly. These agents have to be experts in interpreting vat eu rules and vat rules applicable in their country. For instance, a UK trader with vat registration has to appoint a vat agent that may be conversant with uk vat rules. If that trader imports goods from other vat european countries that have already charged vat on the same then a vat agent of this trader should be able to apply for vat refund in order to reclaim vat back. This process is quite lengthy but could help European traders recover vat amounts previously paid, which in turn can lower their costs and improve their income.
The europa website attempts to educate all vat enabled eu countries to follow a standard system of vat in order to decrease friction among states due to varying vat rates on similar goods or services. Several countries in Europe too have come up with their very own amendments while they attempt to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.
The move of shifting over to vat has benefited various countries in Europe since they have witnessed higher revenue collections over time. However, in a bid to ensure better co-operation between states, vat eu directives and amendments from the EU Commission have made constant efforts to further improve the system of collecting and refunding vat.