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 help you to legally exploit all avenues to make sure that your cost is kept at a minimum and that the problem of double taxation doesn’t eat into your profits.
Several EU countries have embraced vat or value added tax in the last decade to ensure that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and many countries in addition have shifted to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries if you want to begin a business in an EU country that has changed over to vat then appropriate knowledge of eu vat rules is required for keeping a decent leash on your costs.
Any goods or services which you import into your country will attract customs or excise duties or even import vat, dependant on its classification. To be able to charge vat to the customers, you’ll need to turn into a vat registered dealer, which may be done once you cross the vat threshold in taxable sales. You can now make a vat invoice inside your country and charge the applicable vat rates to the customers. Additionally, you will have to file regular vat returns based on your sales and purchases.
However, if you’re based in any european country that follows vat system and also have imported goods into your country where vat was already paid in the original country or used services in a country where vat has been paid then you can reclaim the vat amount. You can 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 any other services overseas, then you can still file for a vat reclaim to recover the quantity of vat paid.
The eu vat rates various eu countries range from 15 to 25%, while special vat rates on certain goods and services range from 1 to 6%. There’s also certain products which are vat exempt. These rates can make a big difference in your product costs and when you are able to recover any tax which has previously been paid then this can make a positive impact on your business bottom-line. A professional and trusted vat agent can surely help you out. Make sure you look for a broker that only takes fees or commissions from vat amounts recovered instead of charging a flat fee.
Many countries in Europe have chose a uniform tax system on products or services, which is great news if you plan to begin a new business in such a country. Your costing process becomes simpler and you will 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.