If you wish to begin a new business in a European country you then should open up a business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even should you end up paying vat more often than once then you can certainly also obtain a vat refund to recover your hard earned money.
Through the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as a method of collecting tax in a very transparent manner whilst plugging tax leaks. The process has become largely successful and also this common method of charging tax on goods and services has facilitated smooth imports and exports between countries that form section of the european vat system.
You can begin a new business in a eu vat state or country and begin importing goods into your own country. You will however be charged the appropriate customs or excise duties and might need to pay import vat depending on the classification of your goods. However, as soon as your vatvalidation taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration in becoming a vat registered trader or dealer. This will likely clear the path to get your own vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to the tax authorities. You’ll now truly be part of your eu vat system.
However, there are many advantages of staying in the europa vat system. In case you have imported goods originating from a member vat country where vat was already charged then you can simply fill out the necessary vat form to claim a vat refund. In case you or your staff have paid vat during trade events or on some other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you might not be able to learn all about the latest eu vat rules it will be better when you allow a specialist vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns on time and also make sure that your vat refund applications are handled well within the time limit. Most countries in Europe that have adopted vat usually have 3 vat rates. The first is the standard vat rate of about 15 to 25% on many goods. Second is the lower vat rate of about 1 to 6% on specific goods while the third is goods that are vat exempt. If you’ve paid vat in a foreign country then this is certainly a large amount, and recovering this amount can easily lower costing and give a much-needed financial injection to your new business.
Vat is really a powerful solution to make sure that tax leakage is reduced in a very seamless manner. You too should opt for starting a small business in a very vat friendly european country while also importing services or goods from a member country that also follows vat. By opening up a small business in a eu vat state you can certainly retain control of your costs while plugging your revenue leaks on services or goods where vat was already charged.