Starting a new business in 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 make sure that your cost is kept at a minimum and therefore the issue of double taxation does not eat into 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 most countries have also shifted to vat check one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to begin a business in an EU country which has changed over to vat then appropriate comprehension of eu vat rules is required to keep a decent leash on your own costs.
Any services or goods which you import in your country will attract customs or excise duties or even import vat, dependant on its classification. To be able to charge vat to your customers, you will also have to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. You can now make a vat invoice in your country and charge the applicable vat rates to your customers. Additionally, you will have to file regular vat returns determined by the sales and purchases.
However, if you are located in any european country that follows vat system and have imported goods to your country where vat was already paid from the original country or used services in a country where vat has been paid then you can reclaim the vat amount. You are able to claim vat amount on goods where vat has already been paid by applying for a vat refund in the original country. In case you or your employees have attended trade events or paid vat on any other services overseas, you’ll be able to still file for a vat reclaim to recover the amount of vat paid.
The european vat rates various eu countries range between 15 to 25%, while special vat rates on certain products or services range from 1 to 6%. There are also certain goods that are vat exempt. These rates can easily make a huge difference in the product costs and if you can recover any tax which has already been paid this can make a positive impact on your enterprise bottom-line. A professional and trusted vat agent can surely help you out. You should look for an agent that only takes fees or commissions from vat amounts recovered rather than charging a flat fee.
Many countries in Europe have chose a uniform tax system on goods and services, which is good news if you intend to start a new business in that country. Your costing process will become simpler and you’ll surely be able to recover vat amounts which may have already been charged previously. However, you need to surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from any financial shocks.