Starting a new business venture in a vat enabled European State or country will only 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 ensure that your costs are kept at a minimum and that the problem of double taxation does not eat into your profits.
Several EU countries have embraced vat or value added tax over the past decade so that trading between such countries proceeds on a common platform. Countries such as the UK, Spain, Greece, Italy, Germany, France, Poland, Netherlands, Sweden, and Hungary, among others have adapted vat and most countries have also shifted 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 an EU country that has changed over to vat then appropriate knowledge of eu vat rules is mandatory for keeping a tight leash on your costs.
Any goods or services that you import into your country will attract customs or excise duties or even import vat, based on its classification. In order to charge vat to your customers, you will also need to turn into a vat registered dealer, which can be done once you cross the vat threshold in taxable sales. You can now make a vat invoice in your country and charge the applicable vat rates to your customers. You will also need to file regular vat returns based on your sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods into your country where vat has already been paid in the original country or have used services in a country where vat has been paid then you can reclaim the vat amount. You can claim vat amount on goods where vat has already been paid by applying for a vat refund in the original country. In case you or your employees have attended trade shows or paid vat on any other services in another country, then you can still file for a vat reclaim to recover the amount of vat paid.
The european vat rates various eu countries range from 15 to 25%, while special vat rates on certain goods and services range from 1 to 6%. There are also certain goods that are vat exempt. These rates can make a huge difference in your product costs and if you can recover any tax that has already been paid then this can make a positive impact on your business bottom-line. An experienced and trusted vat agent can surely help you out. You should seek out an agent that only takes fees or commissions from vat amounts recovered instead of charging a flat fee.
Many countries in Europe have opted for a uniform tax system on goods and services, and this is good news if you plan to start a new business in such a country. Your costing process will become 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 so as to defend your fledgling business from any financial shocks.