Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most countries in Europe. Within the coming years as well as in matters of tax eu countries have mostly chosen vat can be a taxation system that bypasses the perils of double taxation whilst ensuring better adherence to tax payments.
Most countries around the globe usually depended on traditional sales tax systems as a means of collecting revenues through taxes. However, the system wasn’t perfect and goods along with services were taxed multiple times under this system. Vat is applicable every-time specified services or goods http://vatverification.com change hands and vat registered traders simply get back the paid amount of taxes when they issue a vat invoice to their clients and collect the tax back. Regular vat returns make sure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to stay with vat while other countries around the globe too have shifted to this process of collecting taxes on products or services. Although vat rules differ slightly in a number of countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever goods or services are traded. The regular rate of vat is what is normally charged on most products or services, and these range from 15-25%. Other products or services fall into the reduced vat rate of 1-5%, while several others fall into the zero vat rate category. There are also certain vat exempt goods and services where no vat is charged and no vat could be claimed either. Each country possesses its own vat rate classifications where thousands of goods and services are segregated according to their vat rates.
Traders that want to follow the vat system need to turn into vat registered traders in their own country. This can be achieved by crossing the vat threshold limit set by their country. In this particular vat tax eu countries too have various threshold limits and traders should appoint a vat agent with good knowledge of eu vat and uk vat rules, especially if they import services or goods from member eu countries to the UK. Once a trader gets vat registration then a business will need to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country may be claimed back by a trader by choosing vat refunds, which often would help avoid double taxation and provide a income boost for the trader?s business.
Vat has been openly welcomed by most eu countries like the UK, and traders can quickly comprehend the system once they turn into vat registered traders. A professional vat agent readily available may also guide them during calculations and filing of vat returns so as to reclaim any previously paid vat. In matters of tax eu countries have mostly chosen vat and also this unified system helps many traders in such countries to quickly recover previously paid taxes.