Starting a new business venture in a vat enabled European State or country will only bear fruit if 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 costs are kept at the very least and that the issue of double taxation does not eat into your profits.
Several EU countries have embraced vat or value added tax in the last decade to ensure that trading between such countries proceeds on a common platform. Countries such as 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 would like to start a business in an EU country that has changed over to vat then appropriate comprehension of eu vat rules is mandatory to keep a decent leash on your costs vat number.
Any services or goods 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 the customers, you will also have to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. Now you can make a vat invoice in your country and charge the applicable vat rates to the customers. You will also need to file regular vat returns determined by the sales and purchases.
However, if you are located in any european country that follows vat system and have imported goods into your country where vat has already been paid in 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 has already been paid by applying for a vat refund in the original country. In the event you or your employees have attended trade shows or paid vat on any other services in another country, then you can 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 products or 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 can recover any tax that has previously been paid this can make a positive influence on your business bottom-line. A professional and trusted vat agent can surely help you out. You should look for an agent that only takes fees or commissions from vat amounts recovered instead of charging a flat fee vies.
Many countries in Europe have chose a uniform tax system on goods and services, which is great news if you plan to start a whole new business in that country. Your costing process will become simpler and you will 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 any financial shocks.