Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries. in the coming years and in matters of tax eu countries have mostly opted for vat can be a taxation system that bypasses the possible risks with double taxation while also ensuring better adherence to tax payments.
Most countries around the world usually been dependent on traditional sales tax systems as a means 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 goods or services change hands and vat registered traders simply get back the paid amount of taxes once 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 www.vatregistrationnumber.com with vat while other countries around the globe too have shifted to this method of collecting taxes on products or 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 including the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The standard rate of vat is what is normally charged on most goods and services, and these range between 15-25%. Other goods and services fall into the reduced vat rate of 1-5%, while several others fall into the zero vat rate category. Additionally, there are certain vat exempt products or services where no vat is charged and no vat can be claimed either. Each country possesses its own vat rate classifications where a large number of products or services are segregated according to their vat rates.
Traders that want to adhere to the vat system have to become 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 understanding of eu vat and uk vat rules, especially if they import goods or services from member eu countries into the UK. Once a trader gets vat registration then a business will need to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in a foreign country could be claimed back by a trader by opting for vat refunds, which in turn would aid in avoiding double taxation and give a cash flow boost to the trader?s business.
Vat continues to be openly welcomed by most eu countries including the UK, and traders can quickly understand the system when they turn into vat registered traders. An expert 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 also this unified system helps many traders in such countries to quickly recover previously paid taxes.