Introduced first in France in 1954, VAT or value added tax was slowly implemented in most countries in Europe. in the future years and in matters of tax eu countries have mostly opted for vat is a taxation system that bypasses the perils of double taxation whilst ensuring better adherence to tax payments.
Most countries around the globe usually been dependent on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn’t perfect and goods along with services were taxed several times under this system. Vat is relevant every-time specified goods or services change hands and vat registered traders simply get back the paid amount of taxes once they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure that traders provide all vat details to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the United Kingdom, Portugal, and Austria, among others have opted to remain www.vatregistrationnumber.com with vat while other countries around the globe too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, most of them do remain similar in principle to other countries even though vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat ‘s what is normally charged on many goods and services, which range between 15-25%. Other products or services fall into the lower vat rate of 1-5%, while a few others fall into the zero vat rate category. There are also certain vat exempt products or services where no vat is charged and no vat could be claimed either. Each country possesses its own vat rate classifications where thousands of products or services are segregated in line with their vat rates.
Traders that want to follow the vat system have to turn into vat registered traders in their country. This is often achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, especially if they import goods or services from member eu countries into the UK. When a trader gets vat registration then the business will need to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country could be claimed back by a trader by choosing vat refunds, which often would help avoid double taxation and give a income boost to the trader?s business.
Vat has been openly welcomed by most eu countries like the UK, and traders can quickly comprehend the system once they turn into vat registered traders. An expert vat agent on hand may also guide them during calculations and filing of vat returns in order to reclaim any previously paid vat. In matters of tax eu countries have mostly chosen vat and this unified system has helped many traders in these countries to quickly recover previously paid taxes.