Starting a new business venture inside of a vat enabled European State or country is only going to 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 cost is kept at a minimum and therefore the issue of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or vat in the last decade so 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 many countries in addition have moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to begin a business in a EU country which has changed to vat then appropriate knowledge 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 as well as import vat, dependant on its classification. To be able to charge vat to your customers, you’ll have to turn into a vat registered dealer, which can be done as soon as 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. You will also need to file regular vat returns determined by your sales and purchases.
However, if you’re located in any european country that follows vat system and also have imported goods into your country where vat has already been paid from the original country or used services in a country where vat may be paid then you can reclaim the vat amount. You can claim vat amount on goods where vat has already been 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 some other services in another country, you’ll be able to still apply for a vat reclaim to recover the amount of vat paid.
The european vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There are also certain products which are vat exempt. These rates can easily make a huge difference in your product costs and if you can recover any tax which has already been paid then this can make a positive impact on your enterprise bottom-line. An experienced and trusted vat agent can surely help you. You should seek out a broker that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have opted for a uniform tax system on goods and services, and this is good news if you intend to begin a new business in such a country. Your costing process will become simpler and you’ll surely have the ability to recover vat amounts which may have 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 the financial shocks.