If you wish to begin a fresh small business in any European country you then should open up a business in 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 certainly also obtain a vat refund to recover your money.
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 a way of collecting tax in a very transparent manner while also plugging tax leaks. The method has been largely successful and also this common way of charging tax on goods and services has facilitated smooth imports and exports between countries that form section of the european vat system.
You can begin a new business in a eu vat state or country and begin importing goods to your own country. You will however pay the appropriate customs or excise duties and may also need to pay import vat according to the classification of your goods. However, as soon as your vat validation taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will likely clear the path to get your own vat no, charge appropriate vat rates in your vat invoice and also present regular vat returns to the tax authorities. You will now truly be part of your eu vat system.
However, there are several advantages of remaining in the europa vat system. If you have imported goods originating from a member vat country where vat was already charged then you can simply complete the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on some 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 may not be in a position to learn almost allin regards to the latest eu vat rules it will be better if you allow an expert vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns on time and also make sure that your vat refund applications are handled well within time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The first is the normal vat rate of about 15 to 25% on many goods. The second is the reduced vat rate of around 1 to 6% on specific goods while the third is goods that are vat exempt. If you have paid vat in another country then this is certainly large amounts, and recovering this amount can easily lower costing and provide a much-needed financial injection into your new business.
Vat is truly a powerful way to make sure that tax leakage is reduced in a very seamless manner. You too should go for starting a business in a very vat friendly european country whilst importing services or goods from a member country which also follows vat. By opening up a business inside a eu vat state you are able to certainly retain control of your costs while plugging your own revenue leaks on services or goods where vat was already charged.