If you wish to begin a new small business in a European country you then 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 if you do find yourself paying vat more often than once then you can also obtain a vat refund to recoup your hard earned money vat number.
Over the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as a way of collecting tax in a very transparent manner while also plugging tax leaks. The method has become largely successful and this common method of charging tax on goods and services has 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 begin importing goods to your own country. You will however be charged the suitable customs or excise duties and might also need to pay import vat depending on the classification of the goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will clear the path to get your own vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to the tax authorities. You’ll now truly be a part of your eu vat system.
However, there are several advantages of remaining in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged you’ll be able to simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on some other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you may not be able to learn almost allin regards to the latest eu vat rules it will be better if you allow a specialist vat agent to reclaim vat on your behalf.
Your vat agent should also file your vat returns on time and also make sure that your vat refund applications are handled well within time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The first is the standard vat rate of around 15 to 25% on many goods. The second is the lower vat rate of around 1 to 6% on specific goods whilst the third is products which are vat exempt. If you have paid vat in a foreign country then this is certainly a large amount, and recovering this amount can easily reduce your costing and provide a much-needed financial injection into your new business vat number.
Vat is really an efficient solution to ensure that tax leakage is reduced in a seamless manner. You also should go for starting a small business in a vat friendly european country while also importing services or goods from a member country which also follows vat. By setting up a small business in a eu vat state you are able to certainly retain control of your costs while plugging your revenue leaks on services or goods where vat has already been charged.