Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most European countries vatcontrol.com
. in the future years as well as 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 globe 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 multiple times under this system. Vat is relevant every-time specified goods or services 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 ensure 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 globe too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in a number of countries, most of them do remain similar in principle to other countries even though vat rates on similar items might differ.
Most eu countries including the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The regular rate of vat ‘s what is normally charged on many products or services, which range between 15-25%. Other goods and services fall into the lower vat rate of 1-5%, while several others fall into 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 has its own vat rate classifications where thousands of products or services are segregated in line with their vat rates.
Traders that are looking to follow the vat system have to turn into vat registered traders in their own 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 should appoint a vat agent with good knowledge of eu vat and uk vat rules, particularly if they import services or goods from member eu countries to the UK. When a trader gets vat registration then the business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in a foreign country could be claimed back by the trader by opting for vat refunds, which in turn would help avoid double taxation and give a cash flow boost for the trader?s business.
Vat continues to be openly welcomed by most eu countries like the UK, and traders can easily comprehend the system once they turn into vat registered traders. A professional vat agent readily available 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 opted for vat and also this unified system helps many traders in such countries to quickly recover previously paid taxes.