Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries. Within the future years as well as in matters of tax eu countries have mostly chosen vat can be a taxation system that bypasses the possible risks with double taxation whilst ensuring better adherence to tax payments.
Most countries around the globe usually depended on traditional sales tax systems as a way of collecting revenues through taxes. However, the system was not perfect and goods as well as 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 tax amount once they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure 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 United Kingdom, Portugal, and Austria, among others have opted to stay www.vatregistrationnumber.com with vat while other countries around the globe too have shifted to this method of collecting taxes on products or 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 including the UK have 3 basic vat rates that are charged whenever goods or services are traded. The regular rate of vat is what is normally charged on many goods and services, and these range between 15-25%. Other goods and services fall into the reduced vat rate of 1-5%, while a few others fall under the zero vat rate category. Additionally, there are 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 goods and services are segregated in line with their vat rates.
Traders that are looking to adhere to the vat system need 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 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 goods or services from member eu countries into the UK. Once a trader gets vat registration then the business will need to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in another country may be claimed back by the trader by opting for vat refunds, which often would help avoid double taxation and provide a cash flow 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 when they turn into vat registered traders. A professional vat agent readily available can 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 also this unified system has helped many traders in such countries to quickly recover previously paid taxes.