Most EU countries have slowly switched over to VAT or value added tax on goods and services, and in order to abide by a common code all eu countries that follow vat have to follow vat eu directives. These directives are amended regularly in a bid to further fine tune the system so as to avoid tax leaks and make sure better co-operation among member countries in collecting and refunding vat.
The European Union through its website ec.europa.eu attempts to educate member countries and vat registered traders in various countries on a number of rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly shifted to the system of vat tax in a bid to improve tax revenues as well as plug tax holes which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that may vary slightly but are almost similar in principle.
For instance, in the UK a trader that has crossed over the vat threshold limit will need to turn into a vat registered trader before issuing any vat vatvalidation.com/vat invoice. The subsequent vat collected by the trader will then be adjusted against any vat paid as well as the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues connected to customs duties, excise and vat in the United Kingdom. Similarly, a trader in Poland would have to issue a faktura invoice, which essence is a vat invoice however in Polish language, and pay vat to the relevant vat department in that country.
Since each country has adopted vat in a slightly different manner by applying varying vat rates to similar products, traders all over Europe usually have to hire a vat agent or vat consultant to help file vat returns regularly. These agents have to be experts in interpreting vat eu rules and vat rules applicable in their own country. For instance, a UK trader with vat registration has to appoint a vat agent that is conversant with uk vat rules. In the event that trader imports goods from other vat european countries which have already charged vat on the same then the vat agent of this trader should be able to file for vat refund in order to reclaim vat back. This method is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and improve their cash flow.
The europa website attempts to educate all vat enabled eu countries to adhere to a standard system of vat so as to decrease friction among states due to varying vat rates on similar services or goods. Several countries in Europe too have come up with their very own amendments as they try to adapt completely to eu vat directives for better vat compliance in their country and across borders too.
The move of shifting over to vat has benefited various European countries as they have witnessed higher revenue collections over the years. However, in a bid to make sure better co-operation between states, vat eu directives and amendments from the European Commission are making constant efforts to further improve the system of collecting and refunding vat.