Starting a new business venture in a vat enabled European State or country is only going to bear fruit if you confirm all european vat rules before importing goods into that EU State. This move will help you to legally exploit all avenues to make sure that your cost is kept at a minimum and therefore the problem of double taxation does not eat in your profits.
Several EU countries have embraced vat or value added tax 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 most countries in addition have moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you want to start a business in a EU country that has changed over to vat then appropriate knowledge of eu vat rules is required for keeping a decent leash on your own costs vat number.
Any goods or services which you import in your country will attract customs or excise duties or even import vat, based on its classification. To be able to charge vat to your customers, you will also need 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 the customers. You will also have to file regular vat returns determined by your sales and purchases.
However, if you are located in any european country that follows vat system and also have imported goods to your country where vat has already been paid from the original country or used services in a country where vat may be paid you’ll be able to reclaim the vat amount. You can claim vat amount on goods where vat was already 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 any other services in another country, you’ll be able to still apply for a vat reclaim to recuperate the quantity of vat paid.
The european vat rates various eu countries range between 15 to 25%, while special vat rates on certain goods and 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 when you can recover any tax that has already been paid this can easily make a positive impact on your enterprise bottom-line. An experienced and trusted vat agent can surely help you out. Make sure you look for an agent that only takes fees or commissions from vat amounts recovered instead of charging a set fee vies.
Many countries in Europe have opted for a uniform tax system on goods and services, which is good news if you intend to start a new business in such a country. Your costing process will become simpler and you will surely be able to recover vat amounts that have 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.