Most EU countries have slowly switched over to VAT or value added tax on services and goods, along with order to abide by a standard code all eu countries that follow vat need to follow vat eu directives. These directives are amended regularly in a bid to further fine tune the system so as to avoid tax leaks and ensure better co-operation among states in collecting and refunding vat.
The European countries through its website ec.europa.eu tries to educate states and vat registered traders in a variety of countries on some of the rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly shifted to https://vatcheck.com/vat the system of vat tax in a bid to improve tax revenues and also to plug tax holes which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but are almost similar in principle.
For instance, in the United Kingdom a trader which has crossed across the vat threshold limit will need to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected from the trader will then be adjusted against any vat paid and the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues linked to customs duties, excise and vat in the United Kingdom. Similarly, a trader in Poland would need to issue a faktura invoice, which essence is really a vat invoice but in Polish language, and pay vat to the relevant vat department in that country.
Since each country has adopted vat in a slightly different manner by applying varying vat rates to similar products, traders all over Europe usually have to hire a vat agent or vat consultant to assist file vat returns regularly. These agents have to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration needs to appoint a vat agent that is conversant with uk vat rules. If that trader imports goods from other vat european countries which have already charged vat on the same then the vat agent of that trader will be able to apply for vat refund in order to reclaim vat back. This method is quite lengthy but can help European traders recover vat amounts previously paid, which in turn can lower their costs and enhance their cash flow.
The europa website attempts to educate all vat enabled eu countries to adhere to a standard system of vat in order to decrease friction among member countries as a result of varying vat rates on similar goods or services. Several countries in Europe too have come up with their own amendments as they attempt to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.
The move of shifting to vat has benefited various countries in Europe since they have witnessed higher revenue collections over the years. However, in a bid to ensure better co-operation between states, vat eu directives and amendments from the European Commission are making constant efforts to improve the system of collecting and refunding vat.