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 is a taxation system that bypasses the perils of double taxation whilst ensuring better adherence to tax payments.
Most countries around the world usually been dependent on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn't perfect and goods along with 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 tax amount when they issue a vat invoice to their clients and collect the tax back. Regular vat returns make sure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to remain with vat while other countries around the world too have moved to this process of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the UK have 3 basic vat rates which might be charged whenever goods or services are sold. The standard rate of vat is what is normally charged on many products or services, and these range from 15-25%. Other goods and services fall under the lower vat rate of 1-5%, while several 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 possesses its own vat rate classifications where a large number of goods and services are segregated in line with their vat rates.
Traders that are looking to adhere to the vat system have to become vat registered traders in their country. This can be achieved by crossing the vat threshold limit set by their country. In this particular 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 a foreign country may be claimed back by the trader by opting for vat refunds, which often would aid in avoiding double taxation and provide a income boost to the trader?s business.
Vat has been openly welcomed by most eu countries including the UK, and traders can easily understand the system once they turn into vat registered traders. A professional 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 chosen vat and this unified system has helped many traders in such countries to quickly recover previously paid taxes.