Starting a new business in a vat enabled European State or country will only bear fruit if you confirm all european vat rules before importing goods into that EU State. This move will help you to legally exploit all avenues to make sure that your costs are kept at a minimum and that the problem of double taxation does not eat in your profits.
Several EU countries have embraced vat or vat 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, among others have adapted vat and most countries in addition have vatvalidation moved to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you want to start a business in a EU country which has changed to vat then appropriate knowledge of eu vat rules is mandatory to keep a decent leash on your costs.
Any goods or services which you import into your country will attract customs or excise duties or even import vat, based on its classification. To be able to charge vat to your customers, you’ll have to turn into a vat registered dealer, which may be done once 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. Additionally, you will have to file regular vat returns based on the sales and purchases.
However, if you’re based in any european country that follows vat system and also have imported goods to your country where vat was already paid from the original country or used services in a country where vat may be paid you’ll be able to reclaim the vat amount. You can claim vat amount on goods where vat has already been paid by applying for your vat refund inside the original country. In the event you or your employees have attended trade shows or paid vat on any other services overseas, then you can still apply 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 products or services vary from 1 to 6%. There are also certain goods that are vat exempt. These rates can make a huge difference in your product costs and when you can recover any tax which has previously been paid then this can make a positive influence on your business bottom-line. A professional and trusted vat agent can surely help you. You should seek out an agent 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 great news if you plan to start a whole new business in that country. Your costing process becomes simpler and you will surely be able to recover vat amounts which may have been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from the financial shocks.