If you wish to start a new small business in a European country you then should open a business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also if you do find yourself paying vat more often than once then you can certainly also obtain a vat refund to recoup your money.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as a way of collecting tax in a very transparent manner whilst plugging tax leaks. The method has been largely successful and also this common way of charging tax on services and goods has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in a eu vat state or country and begin importing goods into your own country. You’ll however be charged the suitable customs or excise duties and might also need to pay import vat depending on the classification of your goods. However, as soon as your vatvalidation 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 own vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to your tax authorities. You will now truly be a part of your eu vat system.
However, there are several advantages of staying in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged you’ll be able to simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on any 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 in a position to learn almost allin regards to the latest eu vat rules it will be better when you allow a specialist vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns on time as well as make sure that your vat refund applications are handled well within the time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The very first is the standard vat rate of about 15 to 25% on many goods. Second is the reduced vat rate of about 1 to 6% on specific goods whilst the third is products which are vat exempt. If you have paid vat in a foreign country then this is probably a large amount, and recovering this amount can easily lower costing and provide a much-needed financial injection into your new business.
Vat is truly a powerful way to make sure that tax leakage is reduced in a very seamless manner. You too should opt for starting a business in a very vat friendly european country while also importing goods or services from a member country that also follows vat. By setting up a business in a eu vat state you can certainly retain control over your costs while plugging your own revenue leaks on services or goods where vat has already been charged.