Most European countries have adopted vat or value added tax as being a way of taxing goods and services and you need to certainly learn all about exempt vat category in european states. Most countries exempt vat from certain services or goods that could pose a financial burden to the public or needy people.
It is necessary you learn about vat rates including vat exemption in case you plan to start up a business in a European country. This move will help you to slot your products correctly in the designated vat classifications, which can help improve the bottom-line of your business. Once you start your own manufacturing or trading business and import goods or services into your own country then you will need to pay customs and excise duties based on the form of imports. Once you cross the vat threshold limit set up by your country www.vatvalidation.com/vat you will also need to get vat registered to be able to start charging vat by way of a vat invoice. The threshold limit varies within eu states and Britain the limit of £70,000 is achieved when your taxable sales cross that amount during the past 12 months.
However, before you start charging vat to your clients you also must find out about existing vat rates in your own country and other countries. Thus, information about eu vat as well as uk vat is important, especially if your business is located in Britain. Most countries have 3 different types of vat. Almost all services and products fall under the standard vat rate that varies from 15-25%. There are certain services and products that fall under reduced vat rates that vary from 1-6%. The last vat rate is a zero vat rate where no vat is charged by the seller although any vat, if previously paid on that service or product may be refunded using a vat reclaim.
Additionally, there are certain goods and services that usually come under the purview of social services or obligations and usually qualify as exempt vat. Although there might some component of hidden vat inside these services or goods, buyers or sellers cannot claim any vat back on them. In most countries services like insurance, banking, medical including hospitals, education, and social security, and others have exemption from vat.
In addition certain products such as postage stamps, medical equipments, and also lotteries or gambling services are exempt from vat. If your range of activities or imports falls under any of these sections you would then be exempt from paying or collecting any vat although you may also be unable to ask for a vat refund if vat was already paid for the same in another eu country.
If you have trouble in finding out vat rates in various countries as well as your own or have trouble in filing your vat returns then you definitely should hire a specialist vat agent that’s also conversant in the latest customs, excise and vat rules. This will help you to learn all about exempt vat category in european states, which in turn may also prove to be beneficial for your organization.