Starting a new business in a vat enabled European State or country is only going to bear fruit should you confirm all european vat rules before importing goods into that EU State. This move will allow 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 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 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 an EU country which has changed over to vat then appropriate knowledge of eu vat rules is mandatory to keep a decent leash on your costs vies.
Any goods or services that you import in your country will attract customs or excise duties as well as import vat, dependant on its classification. In order to charge vat to your customers, you will also have to turn into a vat registered dealer, which can be done as soon as you cross the vat threshold in taxable sales. Now you can 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 based on the sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods to your country where vat was already paid from the original country or have used services in a country where vat has been 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 shows or paid vat on some other services overseas, 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 from 15 to 25%, while special vat rates on certain products or services range from 1 to 6%. There’s also certain products which are vat exempt. These rates can easily make a big difference in your product costs and when you are able to recover any tax which has previously been paid then this can easily make a positive impact on your enterprise bottom-line. An experienced and trusted vat agent can surely help you out. You should look for a broker that only takes fees or commissions from vat amounts recovered rather than charging a set fee vat registration.
Many countries in Europe have opted for a uniform tax system on goods and services, which is good news if you intend to start a new business in such a country. Your costing process becomes simpler and you will surely have the ability to recover vat amounts that have 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.