If you wish to start a fresh small business in any European country you then should open a small business in a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and also should you end up paying vat more than once then you can also apply for a vat refund to recoup your money.
Over the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as being a way of collecting tax in a very transparent manner while also plugging tax leaks. The method has become largely successful and also this common way of charging tax on services and goods has facilitated smooth imports and exports between countries that form part of the european vat system.
You can start a new business in any eu vat state or country and begin importing goods to your own country. You will however be charged the suitable customs or excise duties and might need to pay import vat depending on the classification of the goods. However, as soon as your vat validation taxable sales cross the vat threshold limit set by the particular eu country then you may need vat registration to turn into a vat registered trader or dealer. This will clear the path for you to get your personal vat no, charge appropriate vat rates as part of your vat invoice as well as present regular vat returns to your tax authorities. You’ll now truly be a part of your eu vat system.
However, there are several advantages of remaining in the europa vat system. In case you have imported goods from a member vat country where vat was already charged then you can simply complete the required vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on some other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you may not able to learn all about the latest eu vat rules it will be better when you allow an expert vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns on time and also make sure that your vat refund applications are handled well within the time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The very first is the normal vat rate of around 15 to 25% on many goods. The second is the lower vat rate of around 1 to 6% on specific goods whilst the third is products which are vat exempt. If you’ve paid vat in another country then this is certainly a large amount, and recovering this amount can easily lower costing and give a much-needed financial injection to your new business.
Vat is really a powerful way to make sure that tax leakage is reduced in a seamless manner. You too should go for starting a business in a very vat friendly european country whilst importing services or goods from a member country that also follows vat. By setting up a small business in a eu vat state you are able to certainly retain control of your costs while plugging your revenue leaks on services or goods where vat has already been charged.