Starting a new business inside of 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 make sure that your cost is kept at the very least and therefore the problem of double taxation doesn’t eat in your profits.
Several EU countries have embraced vat or value added tax over the past 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, amongst others have adapted vat and most countries in addition have shifted to one common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to start a business in an EU country which has changed over to vat then appropriate knowledge of eu vat rules is required for keeping a tight leash on your costs.
Any goods or services which you import in your country will attract customs or excise duties or even import vat, dependant on its classification. In order to charge vat to the customers, you’ll need 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 make a vat invoice in your country and charge the applicable vat rates to your customers. You will also need to file regular vat returns determined by your sales and purchases.
However, if you’re based in any european country that follows vat system and have imported goods into your country where vat was already 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 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 case you or your employees have attended trade shows or paid vat on some other services overseas, then you can still file for a vat reclaim to recover the amount of vat paid.
The eu 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 are also certain goods that are vat exempt. These rates can make a big difference in your product costs and when you can recover any tax which has previously been paid then this can make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you. You should seek out 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 good news if you plan to start a new business in that country. Your costing process becomes simpler and you’ll surely have the ability 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.