Starting a new business venture in a vat enabled European State or country will only bear fruit if you confirm all european vat rules before importing goods into that EU State. This move
will help you to legally exploit all avenues to make sure that your costs are kept at the very least and therefore the problem of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or value added tax over the past decade so that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, amongst others have adapted vat and many countries have also moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to begin a business in a EU country which has changed to vat then appropriate knowledge of eu vat rules is required to keep a tight leash on your costs.
Any services or goods which you import into your country will attract customs or excise duties or even import vat, based on its classification. In order to charge vat to your 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 your customers. You will also need to file regular vat returns based on the sales and purchases.
However, if you’re based in any european country that follows vat system and also have imported goods into your country where vat has already been paid from the original country or used services in a country where vat may be paid then you can reclaim the vat amount. You can claim vat amount on goods where vat has already been paid by applying for a vat refund in the original country. In the event you or your employees have attended trade shows or paid vat on some other services in another country, you’ll be able to still file for a vat reclaim to recover the amount of vat paid.
The eu vat rates various eu countries range between 15 to 25%, while special vat rates on certain products or services range from 1 to 6%. There’s also certain goods that are vat exempt. These rates can easily make a big difference in the product costs and when you can recover any tax which has previously been paid this can make a positive influence on your enterprise bottom-line. An experienced and trusted vat agent can surely help you. Make sure you look for a broker that only takes fees or commissions from vat amounts recovered instead of charging a flat fee.
Many countries in Europe have opted for a uniform tax system on products or services, which is great news if you intend to begin a new business in that country. Your costing process becomes simpler and you’ll surely be able to recover vat amounts which may have been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State so as to defend your fledgling business from any financial shocks.