Starting a new business venture in 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 allow you to legally exploit all avenues to make sure that your cost is kept at a minimum and that the issue of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or value added tax in the last 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 vat check have adapted vat and many countries have also shifted to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you would like to start a business in a EU country that has changed to vat then appropriate knowledge of eu vat rules is required to keep a decent leash on your costs.
Any services or goods which you import in your country will attract customs or excise duties as well as import vat, dependant on its classification. To be able to charge vat to your customers, you will also have to turn into a vat registered dealer, which may be done as soon as you cross the vat threshold in taxable sales. You can now make a vat invoice inside your country and charge the applicable vat rates to your customers. You will also need to file regular vat returns based on the sales and purchases.
However, if you’re located in any european country that follows vat system and also have imported goods into your country where vat has already been paid in the original country or used services in a country where vat may be paid then you can reclaim the vat amount. You can claim vat amount on goods where vat was already paid by applying for a vat refund inside the original country. In case you or your workers have attended trade events or paid vat on any other services in another country, then you can still file for a vat reclaim to recover the amount of vat paid.
The eu vat rates various eu countries range between 15 to 25%, while special vat rates on certain goods and services vary from 1 to 6%. There’s also certain products which are vat exempt. These rates can make a huge difference in your product costs and if you are able to recover any tax that has previously been paid this can easily make a positive influence on your business bottom-line. A professional and trusted vat agent can surely help you out. You should look for a broker that only takes fees or commissions from vat amounts recovered rather than charging a flat fee.
Many countries in Europe have chose a uniform tax system on products or services, and this is good news if you plan to start a new business in that country. Your costing process will become simpler and you will surely be able to recover vat amounts that have been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State so as to defend your fledgling business from the financial shocks.