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 problem of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or vat 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 many countries have also vatvalidation shifted to one 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 that has changed to vat then appropriate comprehension of eu vat rules is mandatory to keep a decent leash on your own costs.
Any goods or services which you import into your country will attract customs or excise duties as well as import vat, based on its classification. In order to charge vat to the customers, you’ll need to turn into a vat registered dealer, which may 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 need to file regular vat returns determined by your sales and purchases.
However, if you are based in any european country that follows vat system and also have imported goods to your country where vat has already been paid in 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 can claim vat amount on goods where vat has already been 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 some other services in another country, you’ll be able to still apply for a vat reclaim to recover the amount of vat paid.
The european vat rates various eu countries range between 15 to 25%, while special vat rates on certain goods and services range from 1 to 6%. There’s also certain goods that are vat exempt. These rates can make a big difference in your product costs and when 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 rather than charging a set fee.
Many countries in Europe have chose a uniform tax system on goods and services, which is good news if you intend to begin a new business in that 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 the financial shocks.