Most EU countries have slowly switched to VAT or value added tax on goods and services, along with order to comply with a standard code all eu countries that follow vat have to follow vat eu directives. These directives are amended regularly in a bid to further optimize the system in order to avoid tax leaks and make sure better co-operation among states in collecting and refunding vat.
The European Union through its website ec.europa.eu tries to educate member countries and vat registered traders in a variety of countries on a number of rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly moved to www.vatcheck.com/vat the system of vat tax in a bid to raise tax revenues and also to plug tax holes which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but they are almost similar in principle.
For instance, in the UK a trader that has crossed across the vat threshold limit will have to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected by the trader will then be adjusted against any vat paid as well as the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues linked to customs duties, excise and vat in the UK. Similarly, a trader in Poland would need to issue a faktura invoice, which essence is a vat invoice but in Polish language, and pay vat to the relevant vat department in the country.
Since each country has adopted vat in a slightly different manner through the use of varying vat rates to similar products, traders all across Europe usually need to hire a vat agent or vat consultant to help file vat returns regularly. These agents need to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration has to appoint a vat agent that may be conversant with uk vat rules. If that trader imports goods from other vat european countries which have already charged vat on the same then the vat agent of that trader will be able to file for vat refund so as to reclaim vat back. This method is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and improve their income.
The europa website tries to educate all vat enabled eu countries to adhere to a common system of vat in order to decrease friction among states as a result of varying vat rates on similar goods or services. Several countries in Europe too have come with their very own amendments as they try to adapt completely to eu vat directives for better vat compliance in their country and across borders too.
The move of shifting over to vat has benefited various countries in Europe as they have witnessed higher revenue collections over time. However, in a bid to make sure better co-operation between states, vat eu directives and amendments issued by the EU Commission have made constant efforts to further improve the system of collecting and refunding vat.