If you wish to begin a new business in a European country you then should open a small business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also should you find yourself paying vat more often than once then you can also obtain a vat refund to recoup your hard earned money vat verification.
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 while also plugging tax leaks. The process has become largely successful and this common method of charging tax on services and goods has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in a eu vat state or country and start importing goods to your own country. You’ll however pay the suitable customs or excise duties and may also also need to pay import vat depending on the classification of the goods. However, once your taxable sales cross the vat threshold limit set by the particular eu country then you may need vat registration to turn into a vat registered trader or dealer. This will clear the path to get your own vat no, charge appropriate vat rates as part of your vat invoice as well as present regular vat returns to the tax authorities. You will now truly be a part of your eu vat system.
However, there are several advantages of staying in the europa vat system. In case you have imported goods from a member vat country where vat was already charged you’ll be able to simply fill out the required vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on any other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you might not be in a position to learn allin regards to the latest eu vat rules it will be better when you allow a specialist vat agent to reclaim vat in your stead.
Your vat agent should also file your vat returns on time and also ensure that your vat refund applications are handled well within time limit. Most countries in Europe which have adopted vat normally have 3 vat rates. The very first is the standard vat rate of about 15 to 25% on most goods. Second is the reduced vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in a foreign country then this is probably large amounts, and recovering this amount can certainly reduce your costing and provide a much-needed financial injection to your new business vat control.
Vat is really a powerful way to ensure that tax leakage is reduced in a seamless manner. You also should go for starting a small business in a vat friendly european country while also importing goods or services from a member country that also follows vat. By setting up a small business in a eu vat state you can certainly retain control of your costs while plugging your revenue leaks on goods or services where vat was already charged.