Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries Www.vatcontrol.com
. Within the future years and 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 way 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 applicable every-time specified services or goods change hands and vat registered traders simply get back the paid amount of taxes once 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 United Kingdom, Portugal, and Austria, among others have opted to remain with vat while other countries around the world too have moved to this method of collecting taxes on products or services. Although vat rules differ slightly in various countries, most of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates which might be charged whenever services or goods are traded. The regular rate of vat ‘s what is usually charged on most goods and services, and these range between 15-25%. Other goods and services fall into the lower vat rate of 1-5%, while a few others fall under the zero vat rate category. There are also certain vat exempt goods and services where no vat is charged and no vat could be claimed either. Each country has its own vat rate classifications where a large number of goods and services are segregated in line with their vat rates.
Traders that want to adhere to the vat system have to become vat registered traders in their 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 might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, especially if they import goods or services from member eu countries into the UK. When a trader gets vat registration then a 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 the trader by choosing vat refunds, which often would aid in avoiding double taxation and give a cash flow boost for the trader?s business.
Vat has been openly welcomed by most eu countries including the UK, and traders can easily comprehend the system when they turn into 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 also this unified system has helped many traders in such countries to quickly recover previously paid taxes.