Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries. Within the coming years as well as in matters of tax eu countries have mostly opted for vat is a taxation system that bypasses the perils of double taxation while also ensuring better adherence to tax payments.
Most countries around the globe usually been dependent on traditional sales tax systems as a means of collecting revenues through taxes. However, the system wasn’t perfect and goods along with services were taxed several times under this system. Vat is relevant every-time specified services or goods change hands and vat registered traders simply get back the paid amount of taxes once they issue a vat invoice to their clients and collect the tax back. Regular vat returns make sure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to remain www.vatregistrationnumber.com with vat while other countries around the globe too have moved to this method of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever services or goods are traded. The standard rate of vat ‘s what is usually charged on many products or services, which range from 15-25%. Other goods and services fall under the reduced vat rate of 1-5%, while a few others fall into the zero vat rate category. Additionally, there are certain vat exempt goods and services where no vat is charged and no vat can be claimed either. Each country possesses its own vat rate classifications where thousands of products or services are segregated according to their vat rates.
Traders that want to follow the vat system need to turn into vat registered traders in their country. This can be achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders should appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import services or goods from member eu countries to the UK. When a trader gets vat registration then the business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country may be claimed back by a trader by opting for vat refunds, which in turn would aid in avoiding double taxation and provide a income boost to the trader?s business.
Vat has been openly welcomed by most eu countries including the UK, and traders can quickly comprehend the system once they turn into vat registered traders. A professional vat agent on hand may also guide them during calculations and filing of vat returns in order to reclaim any previously paid vat. In matters of tax eu countries have mostly opted for vat and also this unified system has helped many traders in these countries to quickly recover previously paid taxes.