Starting a new business 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
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will allow you to legally exploit all avenues to ensure that your costs are kept at a minimum and therefore the issue of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or value added tax in the last decade to ensure that trading between such countries proceeds on a common platform. Countries such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and many countries have also shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to start a business in an EU country that has changed over to vat then appropriate comprehension of eu vat rules is required to keep a decent leash on your own costs.
Any goods or services which you import in your country will attract customs or excise duties or even import vat, based on its classification. To be able to charge vat to your customers, you’ll 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 make a vat invoice inside your country and charge the applicable vat rates to the customers. You will also need to file regular vat returns determined by your sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods to your country where vat has already been paid from the original country or have used services in a country where vat has been paid you’ll be able to reclaim the vat amount. You are able to claim vat amount on goods where vat was already paid by applying for a vat refund inside the original country. In case you or your employees have attended trade shows or paid vat on any other services in another country, you’ll be able to still file for a vat reclaim to recuperate the quantity of vat paid.
The eu vat rates various eu countries range between 15 to 25%, while special vat rates on certain goods and services vary from 1 to 6%. There are also certain goods that are vat exempt. These rates can easily make a big difference in the product costs and when you can recover any tax that has previously been paid this can easily make a positive influence on your enterprise 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.
Many countries in Europe have opted for a uniform tax system on products or services, which is good news if you intend to begin a whole new business in that country. Your costing process becomes simpler and you will surely be able to recover vat amounts which may have been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State so as to defend your fledgling business from the financial shocks.