Introduced first in France in 1954, VAT or value added tax was slowly implemented in most countries in Europe Vatcontrol-com
. in the coming years and in matters of tax eu countries have mostly chosen 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 depended on traditional sales tax systems as a means of collecting revenues through taxes. However, the system was not perfect and goods along with services were taxed several times under this system. Vat is applicable 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 make sure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to remain with vat while other countries around the world too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in various countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The regular rate of vat ‘s what is normally charged on many goods and services, and these range between 15-25%. Other products or services fall under the reduced 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 has its own vat rate classifications where a large number of products or services are segregated according to their vat rates.
Traders that want to follow the vat system need to become vat registered traders in their country. This can be achieved by crossing the vat threshold limit set by their country. In this particular vat tax eu countries too have various threshold limits and traders should appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import services or goods from member eu countries into the UK. When a trader gets vat registration then a business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country may be claimed back by a trader by opting for vat refunds, which in turn would aid in avoiding double taxation and provide 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 become vat registered traders. A professional vat agent readily available may also guide them during calculations and filing of vat returns so as to reclaim any previously paid vat. In matters of tax eu countries have mostly opted for vat and also this unified system helps many traders in such countries to quickly recover previously paid taxes.