Most EU countries have slowly switched over to VAT or value added tax on services and goods, along with order to abide by a standard code all eu countries that follow vat need to follow vat eu directives. These directives are amended regularly in a bid to further fine tune the system in order to avoid tax leaks and ensure better co-operation among states in collecting and refunding vat.
The European countries through its website ec.europa.eu tries to educate member countries and vat registered traders in a variety of countries on a number of rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly moved to vatcheck.com/vat the system of vat tax in a bid to improve tax revenues and also to plug tax holes which were previously draining precious resources. Each vat enabled country possesses its own interpretation of european vat or europa vat rules that might vary slightly but are almost similar in principle.
For example, in the UK a trader which has crossed across the vat threshold limit will need to turn into a vat registered trader before issuing any vat invoice. The following vat collected by the trader will then be adjusted against any vat paid as well as the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues connected to customs duties, excise and vat in the UK. Similarly, a trader in Poland would need to issue a faktura invoice, which essence is really a vat invoice but in Polish language, and pay vat to the relevant vat department in that country.
Since each country has adopted vat in a slightly different manner by applying varying vat rates to similar products, traders all over Europe usually need to hire a vat agent or vat consultant to assist file vat returns regularly. These agents need to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration has to appoint a vat agent that may be conversant with uk vat rules. If that trader imports goods from other vat european countries which have already charged vat on the same then a vat agent of that trader should be able to file for vat refund so as to reclaim vat back. This process is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and enhance their income.
The europa website tries to educate all vat enabled eu countries to adhere to a standard system of vat in order to decrease friction among member countries as a result of varying vat rates on similar goods or services. Several European countries too have come with their own amendments while they try to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.
The move of shifting over to vat has benefited various countries in Europe since they have witnessed higher revenue collections over time. However, in a bid to ensure better co-operation between member countries, vat eu directives and amendments issued by the EU Commission are making constant efforts to improve the system of collecting and refunding vat.