If you wish to start a new business in any European country then you should open a small business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even should you end up paying vat more often than once then you can certainly also obtain a vat refund to recover your money vat control.
Over the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as a way of collecting tax in a transparent manner whilst plugging tax leaks. The method has become largely successful and also this common way of charging tax on goods and services has 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 begin importing goods to your own country. You’ll however be charged the suitable customs or excise duties and may also also need to pay import vat depending on the classification of the goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will clear the path for you to get your own vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to your tax authorities. You will now truly be part of your eu vat system.
However, there are many benefits of remaining in the europa vat system. If you have imported goods originating from a member vat country where vat has already been charged then you can 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 may not in a position to learn almost all about the latest eu vat rules it will be better when you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns in time as well as ensure that your vat refund applications are handled well within the time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The first is the normal vat rate of around 15 to 25% on many goods. The second is the reduced vat rate of about 1 to 6% on specific goods whilst the third is products which are vat exempt. If you have paid vat in a foreign country then this is certainly large amounts, and recovering this amount can certainly lower costing and provide a much-needed financial injection to your new business vat control.
Vat is really a powerful way to make sure that tax leakage is reduced in a very seamless manner. You also should go for starting a business in a very vat friendly european country whilst importing services or goods from a member country which also follows vat. By setting up a business inside 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.