Starting a new business 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 allow you to legally exploit all avenues to ensure that your cost is kept at the very least and therefore the problem of double taxation does not eat into your profits.
Several EU countries have embraced vat or value added tax over the past decade to ensure that trading between such countries proceeds on a common platform. Countries such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and many countries have also shifted 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 which has changed over to vat then appropriate knowledge of eu vat rules is mandatory to keep a tight leash on your costs.
Any services or goods that you import in your country will attract customs or excise duties as well as import vat, based on its classification. In order to charge vat to the customers, you’ll have to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. You can now make 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 your sales and purchases.
However, if you’re based in any european country that follows vat system and also have imported goods to your country where vat has already been paid from the original country or have used services in a country where vat has been paid then you can reclaim the vat amount. You are able to claim vat amount on goods where vat has already been paid by applying for your vat refund in the original country. In case you or your employees have attended trade events or paid vat on some other services in another country, then you can still file for a vat reclaim to recover the quantity of vat paid.
The european vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There are also certain goods that are vat exempt. These rates can make a big difference in your product costs and when you are able to recover any tax that has already been paid this can easily make a positive influence on your enterprise bottom-line. A professional and trusted vat agent can surely help you out. You should seek out an agent that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have opted for a uniform tax system on goods and services, which is good news if you plan to begin a whole new business in such a country. Your costing process will become simpler and you will surely be able to recover vat amounts which may have been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State so as to defend your fledgling business from any financial shocks.