Starting a new business venture inside of 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 help you to legally exploit all avenues to ensure that your cost is kept at the very least and therefore the problem 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 such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, amongst others have adapted vat and most countries have also vatvalidation shifted 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 which has changed over to vat then appropriate knowledge of eu vat rules is required for keeping a tight leash on your costs.
Any services or goods that you import in your country will attract customs or excise duties or even import vat, based on its classification. In order to charge vat to the customers, you’ll have 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 make a vat invoice inside 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’re located in any european country that follows vat system and have imported goods into your country where vat was already 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 your vat refund in the original country. In case you or your workers have attended trade events or paid vat on any other services in another country, then you can still file for a vat reclaim to recover the quantity of vat paid.
The european vat rates various eu countries range from 15 to 25%, while special vat rates on certain goods and services vary 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 are able to recover any tax which has already been paid then this can make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you. You should look for 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 products or services, and this is great news if you plan to start a whole new business in that country. Your costing process becomes simpler and you’ll surely have the ability to recover vat amounts which may have already 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 any financial shocks.