Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most European countries. Within the coming years and 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 globe usually depended on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn’t perfect and goods as well as services were taxed multiple times under this system. Vat is applicable every-time specified goods or services www.vatverification.com change hands and vat registered traders simply get back the paid amount of taxes once 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 UK, Portugal, and Austria, amongst others have opted to stay with vat while other countries around the world too have moved to this method of collecting taxes on goods and services. Although vat rules differ slightly in a number of 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 UK have 3 basic vat rates which might be charged whenever goods or services are traded. The regular rate of vat is what is usually charged on most goods and services, which range between 15-25%. Other goods and services fall into the reduced vat rate of 1-5%, while a few others fall into the zero vat rate category. Additionally, there are certain vat exempt products or services where no vat is charged and no vat can be claimed either. Each country has its own vat rate classifications where thousands of products or services are segregated according to their vat rates.
Traders that want to follow the vat system need to become vat registered traders in their own country. This is often achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders might need to appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import goods or services from member eu countries into the UK. When a trader gets vat registration then the business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country could be claimed back by the trader by opting for vat refunds, which often would help avoid double taxation and provide a income boost for the trader?s business.
Vat continues to be openly welcomed by most eu countries like the UK, and traders can easily understand the system once they become vat registered traders. A professional vat agent on hand 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 also this unified system has helped many traders in these countries to quickly recover previously paid taxes.