If you wish to start a new small business in a European country then you 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 should you find yourself paying vat more often than once then you can certainly also apply for a vat refund to recover your hard earned money check vat number.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as being a method of collecting tax in a very transparent manner while also plugging tax leaks. The method has become largely successful and also this common method of charging tax on goods and services has also facilitated smooth imports and exports between countries that form section of the european vat system.
You can begin a new business in a eu vat state or country and begin importing goods to your own country. You’ll however pay the suitable customs or excise duties and may also also need to pay import vat depending on the classification of your goods. However, once your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will clear the path for you to get your own vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to your tax authorities. You’ll now truly be a part of your eu vat system.
However, there are many advantages of remaining in the europa vat system. If you have imported goods originating from a member vat country where vat has already been charged then you can simply fill out the required vat form to claim a vat refund. In case you or your staff have paid vat during trade shows or on any other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you might not able to learn all about the latest eu vat rules it would be better when you allow a specialist vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns on time as well as make sure that your vat refund applications are handled within the time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The first is the normal vat rate of about 15 to 25% on most goods. Second is the lower vat rate of about 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in another country then this is certainly large amounts, and recovering this amount can easily lower costing and give a much-needed financial injection to your new business vat registration.
Vat is really a powerful way to make sure that tax leakage is reduced in a very seamless manner. You too should opt for starting a business in a vat friendly european country while also importing goods or services from a member country that also follows vat. By setting up a business in a eu vat state you can certainly retain control of your costs while plugging your own revenue leaks on services or goods where vat has already been charged.