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 costs are kept at the very least and therefore the issue of double taxation does not eat into your profits.
Several EU countries have embraced vat or vat 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, among others have adapted vat and many countries have also shifted to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to begin a business in an EU country which has changed to vat then appropriate comprehension of eu vat rules is required for keeping a decent leash on your own costs.
Any services or goods which you import in your country will attract customs or excise duties as well as import vat, based on its classification. In order to charge vat to your customers, you’ll have to turn into a vat registered dealer, which can be done as soon as you cross the vat threshold in taxable sales. Now you can come up with a vat invoice in your country and charge the applicable vat rates to the customers. You will also need to file regular vat returns based on the sales and purchases.
However, if you’re based in any european country that follows vat system and also have imported goods into your country where vat has already been 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 can 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 employees have attended trade events or paid vat on some other services overseas, then you can still apply for a vat reclaim to recover 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 range from 1 to 6%. There are also certain goods that are vat exempt. These rates can make a big difference in the product costs and if you can recover any tax that has previously been paid then this can make a positive influence on your business bottom-line. A professional and trusted vat agent can surely help you out. Make sure you look for a broker that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have chose a uniform tax system on goods and services, and this is great news if you intend to begin a new business in such a country. Your costing process becomes simpler and you will surely be able to recover vat amounts which may have already 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 any financial shocks.