Starting a new business 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 the very least and therefore the problem of double taxation does not eat in your profits.
Several EU countries have embraced vat or value added tax over the past 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, among others have adapted vat and many countries have also vatvalidation moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you want to begin a business in a EU country which has changed to vat then appropriate comprehension of eu vat rules is required for keeping a decent leash on your costs.
Any goods or services which you import in your country will attract customs or excise duties or even import vat, based on its classification. In order to charge vat to the customers, you’ll have 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 make a vat invoice inside your country and charge the applicable vat rates to the customers. Additionally, you will have to file regular vat returns based on the sales and purchases.
However, if you are based in any european country that follows vat system and also have imported goods into your country where vat was already paid from the original country or have used services in a country where vat has been paid you’ll be able to reclaim the vat amount. You are able to 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 workers have attended trade events or paid vat on any other services overseas, then you can still file for a vat reclaim to recuperate 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 vary from 1 to 6%. There are also certain goods that are vat exempt. These rates can make a big difference in your product costs and if you can recover any tax that has already been paid then this can easily make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you out. Make sure you seek out a broker that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have opted for a uniform tax system on goods and services, and this is good news if you plan to start a new business in that country. Your costing process becomes 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 the financial shocks.