Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries. in the coming years as well as in matters of tax eu countries have mostly chosen vat is a taxation system that bypasses the possible risks with double taxation whilst ensuring better adherence to tax payments.
Most countries around the world usually been dependent on traditional sales tax systems as a means of collecting revenues through taxes. However, the system was not perfect and goods as well as services were taxed multiple times under this system. Vat is applicable every-time specified goods or services change hands and vat registered traders simply get back the paid tax amount when they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the United Kingdom, Portugal, and Austria, amongst others have opted to remain http://vatregistrationnumber.com with vat while other countries around the world too have shifted to this process of collecting taxes on goods and services. Although vat rules differ slightly in various countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever services or goods are traded. The standard rate of vat is what is usually charged on most goods and services, and these range between 15-25%. Other goods and services fall under the lower vat rate of 1-5%, while a few others fall under the zero vat rate category. There are also certain vat exempt products or services where no vat is charged and no vat could be claimed either. Each country possesses its own vat rate classifications where thousands of products or services are segregated according to their vat rates.
Traders that are looking to adhere to the vat system have to turn into vat registered traders in their own country. This can be achieved by crossing the vat threshold limit set by their country. In this particular vat tax eu countries too have various threshold limits and traders might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, particularly if they import goods or services from member eu countries into the UK. Once a trader gets vat registration then a business will have to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in a foreign country could be claimed back by a trader by opting for vat refunds, which often would aid in avoiding double taxation and provide a cash flow boost to the trader?s business.
Vat continues to be openly welcomed by most eu countries including the UK, and traders can quickly comprehend the system once they become vat registered traders. A professional vat agent readily available can also guide them during calculations and filing of vat returns so as to reclaim any previously paid vat. In matters of tax eu countries have mostly opted for vat and this unified system has helped many traders in such countries to quickly recover previously paid taxes.