If you wish to start a new small business in a European country then you should open up a business in 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 than once then you can certainly also apply for a vat refund to recoup your hard earned money.
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 being a method of collecting tax in a transparent manner while also plugging tax leaks. The method has become largely successful and this common way of charging tax on goods and services has also facilitated smooth imports and exports between countries that form section of the european vat system.
You can begin a new business in any eu vat state or country and begin importing goods into your own country. You’ll however pay the appropriate customs or excise duties and may also need to pay import vat according to the classification of your goods. However, as soon as your vat validation 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 as part of your vat invoice and also present regular vat returns to your tax authorities. You will now truly be part of your eu vat system.
However, there are many advantages of staying in the europa vat system. If you have imported goods from a member vat country where vat was already charged then you can simply fill out the necessary vat form to claim a vat refund. In case you or your staff have paid vat during trade events or on any other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you may not be in a position to learn almost allin regards to the latest eu vat rules it would 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 as well as ensure that your vat refund applications are handled within the time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The very first is the normal vat rate of around 15 to 25% on most goods. Second is the reduced vat rate of around 1 to 6% on specific goods whilst the third is products which are vat exempt. If you’ve paid vat in a foreign country then this is certainly large amounts, and recovering this amount can certainly reduce your costing and provide a much-needed financial injection into your new business.
Vat is truly a powerful solution to ensure that tax leakage is reduced in a very seamless manner. You too should go for starting a business in a vat friendly european country whilst importing goods or services from a member country which also follows vat. By opening up a business in a eu vat state you are able to certainly retain control of your costs while plugging your revenue leaks on goods or services where vat was already charged.