If you wish to start a fresh business in a European country then you should open a small business in a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even if you do end up paying vat more often than once then you can certainly also apply for a vat refund to recover your money vat control.
Over 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 method of charging tax on goods and services has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can begin a new business in any eu vat state or country and start importing goods into your own country. You’ll however be charged the appropriate customs or excise duties and might also need to pay import vat depending on the classification of your goods. However, once your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration in becoming a vat registered trader or dealer. This will clear the path to get your personal vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to the tax authorities. You’ll now truly be a part of your eu vat system.
However, there are several benefits of staying in the europa vat system. If you have imported goods originating from a member vat country where vat was already charged then you can simply complete the required vat form to claim a vat refund. Just in case you or your staff have paid vat during trade events or on some 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 be in a position to learn all about 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 also needs to file your vat returns in time and also make sure that your vat refund applications are handled within 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 many goods. The second is the lower vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in another country then this is certainly a large amount, and recovering this amount can easily lower costing and give a much-needed financial injection into your new business vat verification.
Vat is truly a powerful solution to make sure that tax leakage is reduced in a seamless manner. You too should go for starting a business in a very vat friendly european country while also importing services or goods from a member country which also follows vat. By opening up a small business inside a eu vat state you can certainly retain control of your costs while plugging your own revenue leaks on goods or services where vat was already charged.