Starting a new business venture in 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 make sure that your cost is kept at the very least and therefore the issue of double taxation doesn’t eat into your profits.
Several EU countries have embraced vat or vat in the last decade to ensure that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and most countries have also moved to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to start a business in an EU country that has changed to vat then appropriate comprehension of eu vat rules is mandatory to keep a decent leash on your costs.
Any goods or services that you import into your country will attract customs or excise duties as well as import vat, based on its classification. To be able to charge vat to the customers, you will also have to turn into a vat registered dealer, which may be done as soon as you cross the vat threshold in taxable sales. You can now come up with a vat invoice in your country and charge the applicable vat rates to your customers. Additionally, you will have to file regular vat returns determined by the sales and purchases.
However, if you are located in any european country that follows vat system and have imported goods to your country where vat was already paid in the original country or used services in a country where vat may be 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 the event you or your employees have attended trade events or paid vat on any other services in another country, you’ll be able to still apply for a vat reclaim to recuperate the amount of vat paid.
The eu vat rates various eu countries range between 15 to 25%, while special vat rates on certain goods and services range from 1 to 6%. There’s also certain products which are vat exempt. These rates can make a huge difference in your product costs and if you can recover any tax that has previously been paid this can make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you out. Make sure you 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 goods and services, which is great news if you plan to begin a new business in that country. Your costing process becomes simpler and you will 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 the financial shocks.