Starting a new business venture inside of 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 a minimum and that the problem of double taxation doesn’t eat into 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, amongst others have adapted vat and many countries in addition have vatvalidation.com moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you would like to start a business in a EU country which has changed to vat then appropriate knowledge of eu vat rules is mandatory for keeping a decent leash on your own 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’ll need to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. Now you can come up with a vat invoice inside your country and charge the applicable vat rates to your customers. Additionally, you will 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 have imported goods to your country where vat was already paid in the original country or 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 a vat refund in the original country. In the event you or your workers have attended trade shows or paid vat on some other services in another country, then you can still apply for a vat reclaim to recover the amount of vat paid.
The european vat rates various eu countries range between 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There are also certain products which are vat exempt. These rates can easily make a huge difference in the product costs and if you are able to recover any tax that has previously been paid then this can easily make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you out. Make sure you seek out a broker that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have chose a uniform tax system on goods and services, and this is great news if you plan to begin a new business in that country. Your costing process becomes simpler and you will surely be able to recover vat amounts that have been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from any financial shocks.