Most European countries have adopted vat or value added tax as a way of taxing products or services and you need to certainly learn about exempt vat category in european states. Most countries exempt vat from certain services or goods that could pose a financial burden to the public or needy people.
It is necessary that you learn about vat rates including vat exemption in the event you intend to start up a business in a European country. This move will help you slot your products correctly within the designated vat classifications, which can help improve the bottom-line of your respective business. When you start your own manufacturing or trading business and import services or goods to your own country then you’ll need to pay customs and excise duties based on the type of imports. Once you cross the vat threshold limit put in place by your country then you will also need to get vat registered to be able to start charging vat through a vat invoice. The threshold limit varies in different eu states and in the UK the limit of £70,000 is achieved once your taxable sales cross that amount in the past Twelve months.
However, before you begin charging vat to your clients you additionally need to find out about existing vat rates in your own country as well as in other countries. Thus, knowledge about eu vat as well as uk vat is crucial, especially if your business is located in Britain. Most countries have 3 different categories of vat. Almost all services and products fall under the standard vat rate that varies from 15-25%. There are www.vatvalidation.com/vat certain services and products that come under reduced vat rates that cover anything from 1-6%. The last vat rate is a zero vat rate where no vat is charged by the seller although any vat, if previously paid on that product or service may be refunded with a vat reclaim.
Additionally, there are certain products or services that typically come under the purview of social services or obligations and usually qualify as exempt vat. Although there might some component of hidden vat inside these services or goods, buyers or sellers cannot claim any vat back on them. In many countries services like insurance, banking, medical including hospitals, education, and social security, among others have exemption from vat.
In addition certain products such as postage stamps, medical equipments, and even lotteries or gambling services are exempt from vat. If your range of activities or imports falls under any of these sections then you would be exempt from paying or collecting any vat even though you might also be unable to request a vat refund if vat was already paid for the same in another eu country.
For those who have trouble in finding out vat rates in various countries as well as your own or have trouble in filing your vat returns then you should hire a professional vat agent that is also conversant in the latest customs, excise and vat rules. This will help you to learn information about exempt vat category in european states, which inturn may also turn out to be good for your business.