If you want to start a new business in any European country you then should open up a business inside a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also if you do find yourself paying vat more often than once then you can also apply for a vat refund to recover your hard earned money vat number.
Over the years many European countries including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as being a way of collecting tax in a very transparent manner whilst plugging tax leaks. The method has been largely successful and also this common way of charging tax on goods and services has facilitated smooth imports and exports between countries that form part of the european vat system.
You can begin a new business in any eu vat state or country and begin importing goods to your own country. You’ll however be charged the suitable customs or excise duties and may also need to pay import vat according to the classification of your goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will clear the path to get your personal vat no, charge appropriate vat rates as part of your vat invoice as well as present regular vat returns to the tax authorities. You will now truly be part of your eu vat system.
However, there are many benefits of staying in the europa vat system. In case you have imported goods from a member vat country where vat has already been charged then you can simply fill out the required vat form to claim a vat refund. 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 might not in a position to learn allin regards to the latest eu vat rules it will be better when you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns in time as well as make sure that your vat refund applications are handled well within time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The first is the standard vat rate of about 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 goods that are vat exempt. If you’ve paid vat in another country then this is probably large amounts, and recovering this amount can certainly reduce your costing and provide a much-needed financial injection to your new business vat registration.
Vat is really a powerful way to make sure that tax leakage is reduced in a very seamless manner. You also should go for starting a small business in a vat friendly european country whilst importing goods or services from a member country which 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 own revenue leaks on goods or services where vat has already been charged.