Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most countries in Europe Vatcontrol.com
. in the future years as well as in matters of tax eu countries have mostly opted for vat can be a taxation system that bypasses the possible risks with double taxation whilst ensuring better adherence to tax payments.
Most countries around the globe usually been dependent on traditional sales tax systems as a means of collecting revenues through taxes. However, the system wasn’t perfect and goods as well as services were taxed several times under this system. Vat is relevant every-time specified services or goods change hands and vat registered traders simply get back the paid amount of taxes when they issue a vat invoice to their clients and collect the tax back. Regular vat returns make sure that traders provide all vat details to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to remain with vat while other countries around the globe too have moved to this process of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, most of them do remain similar in principle to other countries even though vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat ‘s what is normally charged on most goods and services, and these range from 15-25%. Other goods and services fall under the reduced vat rate of 1-5%, while several others fall into the zero vat rate category. Additionally, there are certain vat exempt goods and services where no vat is charged and no vat can be claimed either. Each country has its own vat rate classifications where thousands of goods and services are segregated according to their vat rates.
Traders that want to follow the vat system need to turn into vat registered traders in their own country. This can be achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders should appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import goods or services from member eu countries to the UK. Once a trader gets vat registration then the business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in a foreign country could be claimed back by a trader by opting for vat refunds, which often would aid in avoiding double taxation and provide a cash flow boost for the trader?s business.
Vat continues to be openly welcomed by most eu countries like the UK, and traders can easily comprehend the system when they become vat registered traders. A professional vat agent readily available can also guide them during calculations and filing of vat returns in order to reclaim any previously paid vat. In matters of tax eu countries have mostly chosen vat and also this unified system has helped many traders in these countries to quickly recover previously paid taxes.