Starting a new business venture inside of a vat enabled European State or country will only bear fruit should you confirm all european vat rules before importing goods into that EU State. This move will allow you to legally exploit all avenues to ensure that your costs are kept at a minimum and that the problem of double taxation does not eat into your profits.
Several EU countries have embraced vat or vat over the past decade to ensure that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, amongst others have adapted vat and most countries in addition have shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you would like to start a business in a EU country which has changed over to vat then appropriate knowledge of eu vat rules is required for keeping a tight leash on your costs vat number.
Any goods or services which you import into your country will attract customs or excise duties as well as import vat, based on its classification. In order to charge vat to your customers, you will also need to turn into a vat registered dealer, which can be done as soon as you cross the vat threshold in taxable sales. Now you can come up with a vat invoice inside your country and charge the applicable vat rates to the customers. Additionally, you will have to file regular vat returns based on your sales and purchases.
However, if you are based in any european country that follows vat system and also have imported goods into your country where vat has already been paid in the original country or used services in a country where vat may be paid you’ll be able to reclaim the vat amount. You can claim vat amount on goods where vat was already paid by applying for a vat refund in the original country. In case you or your employees have attended trade shows or paid vat on some other services overseas, you’ll be able to still file for a vat reclaim to recover the amount of vat paid.
The eu vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services range from 1 to 6%. There are also certain products which are vat exempt. These rates can make a big difference in your product costs and when you are able to recover any tax which has already been paid then this can make a positive influence on your business bottom-line. An experienced and trusted vat agent can surely help you out. Make sure you look for an agent that only takes fees or commissions from vat amounts recovered instead of charging a flat fee vat check.
Many countries in Europe have chose a uniform tax system on products or services, which is great news if you plan to start a new business in such a country. Your costing process will become simpler and you’ll surely have the ability to recover vat amounts that have already been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from any financial shocks.