Starting a new business 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 help you to legally exploit all avenues to ensure that your costs are kept at the very least and that the issue of double taxation doesn’t eat into 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 have adapted vat and many countries have also shifted to vat check 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 an EU country which has changed to vat then appropriate comprehension of eu vat rules is required for keeping a tight leash on your own costs.
Any goods or services which you import into your country will attract customs or excise duties or even import vat, dependant on its classification. In order to charge vat to the customers, you will also need to turn into a vat registered dealer, which can be done as soon as you cross the vat threshold in taxable sales. You can now come up with a vat invoice in your country and charge the applicable vat rates to your customers. Additionally, you will need to file regular vat returns determined by the sales and purchases.
However, if you are based in any european country that follows vat system and also have imported goods to your country where vat has already been paid from the original country or used services in a country where vat has been paid you’ll be able to reclaim the vat amount. You can claim vat amount on goods where vat was already paid by applying for a vat refund in the original country. In case you or your workers have attended trade shows or paid vat on any other services in another country, 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 goods and services range from 1 to 6%. There’s also certain products which are vat exempt. These rates can easily make a huge difference in the product costs and if you can recover any tax which has already been paid then this can easily make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you out. You should seek out a broker that only takes fees or commissions from vat amounts recovered rather than charging a flat fee.
Many countries in Europe have opted for a uniform tax system on goods and services, which is good news if you plan to begin a whole new business in such a country. Your costing process becomes simpler and you will surely have the ability to recover vat amounts which may have already 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 any financial shocks.