Starting a new business in a vat enabled European State or country will only bear fruit should 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 therefore the issue of double taxation does not eat into your profits.
Several EU countries have embraced vat or value added tax over the past decade to ensure 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 would like to start a business in an EU country which has changed to vat then appropriate comprehension of eu vat rules is mandatory to keep a decent leash on your own costs.
Any goods or services which you import into your country will attract customs or excise duties as well as import vat, based 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 make a vat invoice in your country and charge the applicable vat rates to your customers. Additionally, you will have to file regular vat returns based on the sales and purchases.
However, if you are based in any european country that follows vat system and have imported goods to your country where vat has already been paid in 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 has already been paid by applying for a vat refund in the original country. In case you or your employees have attended trade events or paid vat on some other services in another country, you'll be able to still file for a vat reclaim to recuperate the quantity of vat paid.
The eu vat rates various eu countries range between 15 to 25%, while special vat rates on certain products or services vary from 1 to 6%. There are also certain products which are vat exempt. These rates can easily make a big difference in the product costs and if you are able to recover any tax that has previously been paid this can make a positive influence on your enterprise 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 chose a uniform tax system on goods and services, which is good news if you intend to start a whole new business in that country. Your costing process becomes simpler and you will surely have the ability to recover vat amounts that have 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.