Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries. Within the future years and in matters of tax eu countries have mostly opted for vat can be a taxation system that bypasses the perils of double taxation whilst ensuring better adherence to tax payments.
Most countries around the world usually depended on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn’t perfect and goods along with services were taxed several times under this system. Vat is relevant every-time specified goods or services http://vatverification.com change hands and vat registered traders simply get back the paid tax amount once they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure 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, amongst others have opted to stay with vat while other countries around the globe too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, the majority of them do remain similar in principle to other countries even though vat rates on similar items might differ.
Most eu countries including the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The regular rate of vat ‘s what is normally charged on most goods and services, and these range between 15-25%. Other goods and services fall into the lower vat rate of 1-5%, while a few others fall into the zero vat rate category. Additionally, there are certain vat exempt products or services where no vat is charged and no vat could be claimed either. Each country possesses its own vat rate classifications where a large number of products or services are segregated in line with their vat rates.
Traders that are looking to follow the vat system have to become vat registered traders in their country. This is often achieved by crossing the vat threshold limit set by their country. In this 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 into the UK. When a trader gets vat registration then a business will have to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in another country may be claimed back by the trader by choosing vat refunds, which in turn would aid in avoiding double taxation and give a cash flow boost for the trader?s business.
Vat continues to be openly welcomed by most eu countries like the UK, and traders can easily comprehend the system once they become vat registered traders. An expert vat agent on hand can 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 this unified system has helped many traders in these countries to quickly recover previously paid taxes.