Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most European countries. Within the coming years and in matters of tax eu countries have mostly chosen vat can be a taxation system that bypasses the perils of double taxation whilst ensuring better adherence to tax payments.
Most countries around the world usually depended on traditional sales tax systems as a means of collecting revenues through taxes. However, the system was not perfect and goods as well as services were taxed several times under this system. Vat is relevant every-time specified services or goods http://vatverification.com 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 products or 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 such as the United kingdom has 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat is what is usually charged on many products or services, and these range between 15-25%. Other products or services fall under the lower vat rate of 1-5%, while a few 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 can be claimed either. Each country has its own vat rate classifications where thousands 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 own country. This can be achieved by crossing the vat threshold limit set by their country. In this 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, particularly if they import services or goods from member eu countries into the UK. Once a trader gets vat registration then a business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country could be claimed back by a trader by opting for vat refunds, which in turn would help avoid double taxation and give a income boost for the trader?s business.
Vat has been openly welcomed by most eu countries like the UK, and traders can easily 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 opted for vat and also this unified system helps many traders in these countries to quickly recover previously paid taxes.