If you wish to start a fresh small business in a European country then you should open a business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even should you end up paying vat more than once then you can also obtain a vat refund to recoup your hard earned money vat verification.
Through the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as a method of collecting tax in a very transparent manner whilst plugging tax leaks. The process has been largely successful and also this common method 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 any eu vat state or country and begin importing goods into your own country. You will however be charged the appropriate customs or excise duties and might need to pay import vat according to the classification of the goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration in becoming a vat registered trader or dealer. This will clear the path for you to get your personal vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to the tax authorities. You’ll now truly be a part of your eu vat system.
However, there are several benefits of staying in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged then you can simply complete the required vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on some other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you might not be in a position to learn all about the latest eu vat rules it would be better when you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns on time and also ensure that your vat refund applications are handled well within the time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The very first is the normal vat rate of around 15 to 25% on many goods. Second is the reduced vat rate of about 1 to 6% on specific goods while the third is products which are vat exempt. If you have paid vat in a foreign country then this is probably a large amount, and recovering this amount can certainly reduce your costing and provide a much-needed financial injection to your new business check vat number.
Vat is really an efficient solution to ensure that tax leakage is reduced in a very seamless manner. You too should opt for starting a small business in a vat friendly european country whilst importing goods or services from a member country which also follows vat. By setting up a business in a eu vat state you are able to certainly retain control over your costs while plugging your own revenue leaks on services or goods where vat has already been charged.