Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most European countries. Within the coming years and in matters of tax eu countries have mostly chosen 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 world 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 www.vatverification.com 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 ensure 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, amongst others have opted to stay with vat while other countries around the globe too have moved to this process of collecting taxes on products or 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 including the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The standard rate of vat is what is normally charged on most products or services, and these range from 15-25%. Other goods and services fall under the lower vat rate of 1-5%, while a few others fall into the zero vat rate category. Additionally, there are certain vat exempt products or services where no vat is charged and no vat could be claimed either. Each country has its own vat rate classifications where thousands of goods and services are segregated in line with their vat rates.
Traders that are looking to follow the vat system need to turn into vat registered traders in their own country. This is often 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 services or goods from member eu countries to the UK. Once a trader gets vat registration then the business will need to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country may be claimed back by a trader by opting for vat refunds, which often would aid in avoiding double taxation and give a income boost to the trader?s business.
Vat continues to be openly welcomed by most eu countries like the UK, and traders can easily comprehend the system once they become vat registered traders. An expert vat agent on hand 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 opted for vat and this unified system has helped many traders in such countries to quickly recover previously paid taxes.