Starting a new business in a vat enabled European State or country is only going to bear fruit if you confirm all european vat rules before importing goods into that EU State. This move
will allow you to legally exploit all avenues to make sure that your costs are kept at the very least and that the problem of double taxation does not eat in your profits.
Several EU countries have embraced vat or value added tax in the last decade so that trading between such countries proceeds on a common platform. Countries like the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and most countries have also moved to a common currency, i.e. the Euro. This move has facilitated smoother trading between these countries and if you want to start a business in a EU country which has changed over to vat then appropriate comprehension of eu vat rules is required to keep a tight leash on your own costs.
Any goods or services which you import in your country will attract customs or excise duties as well as import vat, dependant on its classification. To be able to charge vat to your customers, you’ll have to turn into a vat registered dealer, which can be done as soon as you cross the vat threshold in taxable sales. Now you can come up with a vat invoice inside your country and charge the applicable vat rates to the customers. Additionally, you will have to file regular vat returns determined by the sales and purchases.
However, if you’re located in any european country that follows vat system and have imported goods into your country where vat was already paid from the original country or used services in a country where vat has been paid then you can reclaim the vat amount. You are able to claim vat amount on goods where vat was already paid by applying for a vat refund inside the original country. In case you or your workers have attended trade events or paid vat on some other services overseas, then you can still apply for a vat reclaim to recover the amount of vat paid.
The eu vat rates various eu countries range from 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There’s also certain goods that are vat exempt. These rates can make a huge difference in your product costs and when you are able to recover any tax which has previously been paid this can make a positive impact on your enterprise bottom-line. A professional and trusted vat agent can surely help you out. Make sure you seek out a broker that only takes fees or commissions from vat amounts recovered instead of charging a set fee.
Many countries in Europe have chose a uniform tax system on goods and services, and this is good news if you plan to start a whole new business in such a country. Your costing process becomes simpler and you will surely be able to recover vat amounts that have already been charged previously. However, you should surely confirm all european vat rules before importing goods into an EU State in order to defend your fledgling business from any financial shocks.