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 allow you to legally exploit all avenues to ensure that your cost is kept at a minimum and therefore the problem of double taxation doesn’t eat into 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 in addition have shifted to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you would like to start a business in an EU country that has changed to vat then appropriate comprehension of eu vat rules is mandatory for keeping a decent leash on your 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. 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. Now you can come up with a vat invoice in your country and charge the applicable vat rates to your customers. You will also have 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 have imported goods into your country where vat was already paid from the original country or have used services in a country where vat has been paid you’ll be able to reclaim the vat amount. You are able to claim vat amount on goods where vat has already been paid by applying for a vat refund in the original country. In the event you or your workers have attended trade events or paid vat on some other services overseas, you’ll be able to still apply for a vat reclaim to recuperate the quantity of vat paid.
The eu vat rates various eu countries range between 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 your product costs and if you are able to recover any tax which has already been paid then this can easily make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you. Make sure you seek out an agent that only takes fees or commissions from vat amounts recovered rather than charging a flat fee.
Many countries in Europe have chose a uniform tax system on goods and services, which is good news if you intend to start a new business in that country. Your costing process becomes 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 so as to defend your fledgling business from the financial shocks.