If you wish to start a new business in a European country you then should open up a small business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even if you do end up paying vat more often than once then you can also obtain a vat refund to recover your hard earned money.
Through the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as being a way of collecting tax in a transparent manner whilst plugging tax leaks. The process has become largely successful and this common method of charging tax on services and goods has also facilitated smooth imports and exports between countries that form section of the european vat system.
You can start a new business in any eu vat state or country and begin importing goods to your own country. You will however be charged the suitable customs or excise duties and may also also need to pay import vat according to the classification of the goods. However, once your vat validation taxable sales cross the vat threshold limit set by the particular eu country then you may need vat registration in becoming a vat registered trader or dealer. This will likely clear the path to get your personal vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to the tax authorities. You will now truly be a part of your eu vat system.
However, there are several advantages of staying in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged you’ll be able to simply complete the required vat form to claim a vat refund. In case you or your staff have paid vat during trade events or on some other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you may not able to learn all about the latest eu vat rules it would be better if you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent should also file your vat returns on time and also make sure that your vat refund applications are handled well within time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The first is the standard vat rate of around 15 to 25% on many goods. The second is the reduced vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in a foreign country then this is certainly large amounts, and recovering this amount can easily reduce your costing and give a much-needed financial injection into your new business.
Vat is truly a powerful solution to make sure that tax leakage is reduced in a very seamless manner. You also should opt for starting a small business in a vat friendly european country whilst importing services or goods from a member country which also follows vat. By opening up a business inside a eu vat state you can certainly retain control of your costs while plugging your revenue leaks on goods or services where vat was already charged.