If you wish to begin a fresh small business in any European country then you should open a small business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also should you end up paying vat more than once then you can also obtain a vat refund to recoup your money.
Over the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as a way of collecting tax in a transparent manner while also plugging tax leaks. The process has been largely successful and also this common way of charging tax on goods and services has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in any eu vat state or country and start importing goods into your own country. You’ll however pay the suitable customs or excise duties and might need to pay import vat according to the classification of the goods. However, as soon as your vatvalidation taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration in becoming a vat registered trader or dealer. This will likely clear the path for you to get your personal vat no, charge appropriate vat rates as part of your vat invoice as well as present regular vat returns to the tax authorities. You will now truly be part of your eu vat system.
However, there are several advantages of remaining in the europa vat system. If you have imported goods from a member vat country where vat was already charged then you can simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade events or on some other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you may not be able to learn all about the latest eu vat rules it would be better when you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns on time as well as make sure that your vat refund applications are handled well within the time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The very first is the normal vat rate of around 15 to 25% on most goods. Second is the reduced vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in another country then this is certainly a large amount, and recovering this amount can easily lower costing and give a much-needed financial injection to your new business.
Vat is really a powerful solution to make sure that tax leakage is reduced in a very seamless manner. You too should go for starting a small business in a very vat friendly european country whilst importing goods or services from a member country which also follows vat. By setting up a business in a eu vat state you are able to certainly retain control over your costs while plugging your revenue leaks on goods or services where vat was already charged.