If you wish to start a new small business in a European country then you should open a small business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and also if you do find yourself paying vat more often than once then you can certainly also obtain a vat refund to recoup your money.
Through the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as a method of collecting tax in a transparent manner whilst plugging tax leaks. The method has been largely successful and also this common method of charging tax on services and goods has facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in a eu vat state or country and start importing goods to your own country. You’ll however pay the appropriate customs or excise duties and may also need to pay import vat depending on the classification of the goods. However, once your vatvalidation.com 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 own vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to the tax authorities. You’ll now truly be part of your eu vat system.
However, there are several benefits of staying in the europa vat system. If you have imported goods from a member vat country where vat was already charged you’ll be able to simply complete the necessary 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 can also be claimed back from that country provided all documentary proof is shown. As you may not able to learn allin regards to the latest eu vat rules it would be better if you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent should also file your vat returns on time as well as ensure that your vat refund applications are handled within time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The first is the normal vat rate of about 15 to 25% on many goods. The second is the lower vat rate of around 1 to 6% on specific goods whilst 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 easily lower costing and provide a much-needed financial injection to your new business.
Vat is really a powerful way to make sure that tax leakage is reduced in a seamless manner. You also should opt for starting a small business in a very vat friendly european country while also importing goods or services from a member country which also follows vat. By setting up a small business in a eu vat state you are able to certainly retain control over your costs while plugging your own revenue leaks on goods or services where vat was already charged.