If you want to start a new business in any European country then you should open up a small business in a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even if you do end up paying vat more than once then you can certainly also apply for a vat refund to recoup your hard earned money vat number.
Over the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as being a way of collecting tax in a transparent manner while also plugging tax leaks. The process has been largely successful and also this common way of charging tax on services and goods has also facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in a eu vat state or country and begin importing goods into your own country. You’ll however pay the appropriate customs or excise duties and might need to pay import vat according to the classification of your goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will likely clear the path to get your own vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to your tax authorities. You will now truly be a part of your eu vat system.
However, there are many advantages of staying in the europa vat system. In case you have imported goods originating from a member vat country where vat was already charged you’ll be able to simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on any other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you may not able to learn almost all about the latest eu vat rules it will be better if you allow an expert vat agent to reclaim vat in your stead.
Your vat agent should also file your vat returns in time as well as make sure that your vat refund applications are handled within time limit. Most countries in Europe that have adopted vat usually have 3 vat rates. The first is the standard vat rate of about 15 to 25% on most goods. The second is the reduced vat rate of about 1 to 6% on specific goods while the third is goods that are vat exempt. If you have paid vat in another country then this is certainly large amounts, and recovering this amount can easily reduce your costing and provide a much-needed financial injection into your new business check vat number.
Vat is truly an efficient solution to make sure that tax leakage is reduced in a seamless manner. You too should opt for starting a business in a very vat friendly european country while also importing services or goods from a member country which also follows vat. By setting up a business in a eu vat state you can certainly retain control of your costs while plugging your own revenue leaks on goods or services where vat was already charged.