If you want to start a new business in a European country then you should open a small business inside a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and also if you do find yourself paying vat more than once then you can certainly also obtain a vat refund to recover your money.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as being a method of collecting tax in a very transparent manner while also plugging tax leaks vatverification
. 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 section of the european vat system.
You can start a new business in any eu vat state or country and start importing goods to your own country. You’ll however be charged the appropriate customs or excise duties and might 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 in becoming a vat registered trader or dealer. This will likely clear the path to get your personal vat no, charge appropriate vat rates in your vat invoice as well as present regular vat returns to your tax authorities. You will now truly be part of your eu vat system.
However, there are several benefits of remaining in the europa vat system. In case you have imported goods originating from a member vat country where vat was already charged then you can simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade events or on some other services that attract vat then such vat rates too can be claimed back from that country provided all documentary proof is shown. As you may not be in a position to learn almost allin regards to 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 in time as well as ensure that your vat refund applications are handled within time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The first is the standard vat rate of around 15 to 25% on many goods. Second is the lower vat rate of around 1 to 6% on specific goods while the third is products which are vat exempt. If you have paid vat in a foreign country then this is probably large amounts, and recovering this amount can easily lower costing and provide a much-needed financial injection to your new business.
Vat is really a powerful solution to ensure that tax leakage is reduced in a seamless manner. You too should opt for starting a small business in a very vat friendly european country whilst importing goods or services from a member country that also follows vat going here. By opening up a business in a eu vat state you can certainly retain control over your costs while plugging your own revenue leaks on goods or services where vat was already charged.
