Starting a new business 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 make sure that your costs are kept at the very least and that the problem of double taxation doesn’t eat into your profits.
Several EU countries have embraced vat or vat in the last 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, among others have adapted vat and most countries have also shifted 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 an EU country which has changed over to vat then appropriate comprehension of eu vat rules is mandatory to keep a tight leash on your costs.
Any goods or services 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 need to turn into a vat registered dealer, which may be done as soon as you cross the vat threshold in taxable sales. Now you can come up with a vat invoice in your country and charge the applicable vat rates to the customers. Additionally, you will need to file regular vat returns based on the sales and purchases.
However, if you’re based 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 has been paid then you can reclaim the vat amount. You are able to claim vat amount on goods where vat was already paid by applying for your vat refund inside the original country. In the event you or your employees have attended trade events or paid vat on any other services in another country, 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 goods and services range from 1 to 6%. There’s also certain goods that are vat exempt. These rates can easily make a big difference in the product costs and if you are able to recover any tax that has already been paid this can make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you. Make sure you seek out a broker that only takes fees or commissions from vat amounts recovered rather than charging a set fee.
Many countries in Europe have chose a uniform tax system on products or services, and this is great news if you plan to start a new business in such a country. Your costing process becomes simpler and you will surely have the ability 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 so as to defend your fledgling business from any financial shocks.