Starting a new business venture in a vat enabled European State or country will only bear fruit should you confirm all european vat rules before importing goods into that EU State. This move will allow you to legally exploit all avenues to ensure that your cost is kept at a minimum and that the issue of double taxation doesn’t eat into your profits.
Several EU countries have embraced vat or vat over the past decade so that trading between such countries proceeds on a common platform. Countries such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and many countries have also shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to begin a business in a EU country that has changed over to vat then appropriate knowledge of eu vat rules is required to keep a tight leash on your costs vat registration.
Any services or goods that you import into your country will attract customs or excise duties as well as import vat, dependant on its classification. In order to charge vat to your customers, you will also need to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. Now you can come up with a vat invoice in your country and charge the applicable vat rates to the customers. You will also have to file regular vat returns based on the sales and purchases.
However, if you are located 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 a vat refund in the original country. In the event you or your workers have attended trade shows or paid vat on some other services in another country, you’ll be able to still apply for a vat reclaim to recuperate the quantity of vat paid.
The european 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 make a big difference in the product costs and when you are able to recover any tax that has previously been paid this can easily make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you. You should look for a broker that only takes fees or commissions from vat amounts recovered instead of charging a flat fee vat check.
Many countries in Europe have opted for 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 will become simpler and you will surely have the ability to recover vat amounts which may 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 any financial shocks.