Most European Union countries have slowly switched to VAT or value added tax on goods and services, along with 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 states in collecting and refunding vat.
The European countries through its website ec.europa.eu tries to educate states and vat registered traders in a variety of countries on a number of rules and 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 moved to the system of vat tax in a bid to raise tax revenues and also to plug tax holes vatvalidation.com/vat that 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 instance, in the UK a trader which has crossed across the vat threshold limit will have to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected from the trader will then be adjusted against any vat paid as well as 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 UK. 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 across Europe usually have to hire a vat agent or vat consultant to assist file vat returns regularly. These agents need to be experts in interpreting vat eu rules and vat rules applicable in their own country. For instance, a UK trader with vat registration has to appoint a vat agent that is conversant with uk vat rules. If that trader imports goods from other vat countries in Europe which have already charged vat on the same then the vat agent of that trader will be able to apply for vat refund in order to reclaim vat back. This method is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and improve their income.
The europa website attempts to educate all vat enabled eu countries to follow a common system of vat so as to decrease friction among states as a result of varying vat rates on similar goods or services. Several countries in Europe too have come up with their very own amendments as they try to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.
The move of shifting to vat has benefited various European countries 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 issued by the European Commission have made constant efforts to improve the system of collecting and refunding vat.