Starting a new business venture inside of a vat enabled European State or country is only going to 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 costs are kept at the very least and therefore 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 so 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 moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you want to start a business in an EU country that has changed to vat then appropriate knowledge of eu vat rules is required for keeping a tight leash on your own costs.
Any services or goods which you import in your country will attract customs or excise duties or even import vat, dependant on its classification. To be able to charge vat to your customers, you’ll have to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. Now you can make a vat invoice in 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 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 are able to 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 are also certain goods that are vat exempt. These rates can easily make a huge difference in your product costs and when you are able to recover any tax which has already been paid this can easily make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you out. Make sure you look for an agent that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have chose a uniform tax system on products or services, which is good news if you intend to begin a whole new business in such a country. Your costing process will become simpler and you will surely be able to recover vat amounts that have been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from the financial shocks.