If you want to begin a fresh small business in a European country then you should open up a small business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and even if you do end up paying vat more than once then you can also obtain a vat refund to recoup your money vat verification.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as being a way of collecting tax in a very transparent manner while also plugging tax leaks. The method has become largely successful and also 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 start importing goods to your own country. You’ll however be charged the appropriate customs or excise duties and might need to pay import vat according to the classification of your goods. However, as soon as 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 likely 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 your tax authorities. You’ll now truly be a part of your eu vat system.
However, there are many benefits of staying in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged then you can simply complete the necessary 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 can also be claimed back from that country provided all documentary proof is shown. As you might not be in a position to learn allin regards to the latest eu vat rules it will be better if 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 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 about 15 to 25% on most goods. Second is the reduced vat rate of about 1 to 6% on specific goods whilst the third is goods that are vat exempt. If you’ve paid vat in a foreign country then this is certainly large amounts, and recovering this amount can easily reduce your costing and give a much-needed financial injection into your new business vat check.
Vat is really a powerful way to make sure that tax leakage is reduced in a very seamless manner. You also should opt for starting a business in a vat friendly european country while also importing services or goods from a member country which also follows vat. By opening up a small business in a eu vat state you are able to certainly retain control of your costs while plugging your own revenue leaks on services or goods where vat was already charged.