Starting a new business 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 help you to legally exploit all avenues to ensure that your costs are kept at the very least and that the issue of double taxation doesn’t eat into 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, amongst others have adapted vat and most countries in addition have shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to begin a business in an EU country which has changed over to vat then appropriate comprehension of eu vat rules is required to keep a decent leash on your costs.
Any services or goods which you import into 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 have to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. You can now come up with a vat invoice inside your country and charge the applicable vat rates to your customers. Additionally, you will 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 into your country where vat was already paid from the original country or have used services in a country where vat may be 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 your vat refund inside the original country. In the event you or your workers have attended trade events or paid vat on some other services in another country, then you can still apply for a vat reclaim to recuperate the quantity of vat paid.
The eu vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There’s also certain products which are vat exempt. These rates can make a huge difference in the product costs and if you are able to recover any tax which has previously been paid this can make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you. Make sure you look for an agent that only takes fees or commissions from vat amounts recovered instead of charging a flat fee.
Many countries in Europe have chose a uniform tax system on products or services, which is good news if you intend to begin a whole new business in that country. Your costing process will become simpler and you’ll surely be able to recover vat amounts that have already 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.