Most European Union countries have slowly switched over to VAT or value added tax on services and goods, and in order to comply with a common code all eu countries that follow vat have to follow vat eu directives. These directives are amended regularly in a bid to help fine tune the system in order to avoid tax leaks and ensure better co-operation among member countries in collecting and refunding vat.
The European Union through its website ec.europa.eu attempts to educate member countries and vat registered traders in a variety of countries on some of the rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly shifted to the system of vat tax in a bid to improve tax revenues as well as plug tax holes which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but they are almost similar in principle.
For example, in the United Kingdom a trader that has crossed over the vat threshold limit will have to turn into a vat registered trader before issuing any vat http://vatvalidation.com/vat invoice. The subsequent vat collected by the trader will then be adjusted against any vat paid as well as the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues linked to customs duties, excise and vat in the United Kingdom. Similarly, a trader in Poland would have to issue a faktura invoice, which essence is really a vat invoice however in Polish language, and pay vat to the relevant vat department in that country.
Since each country has adopted vat in a slightly different manner through the use of varying vat rates to similar products, traders all across Europe usually need to hire a vat agent or vat consultant to help file vat returns regularly. These agents have to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration needs to appoint a vat agent that may be conversant with uk vat rules. If that trader imports goods from other vat countries in Europe which have already charged vat on the same then a vat agent of that trader will be able to apply for vat refund so as to reclaim vat back. This method is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and improve their income.
The europa website tries to educate all vat enabled eu countries to adhere to a common system of vat so as to decrease friction among states due to varying vat rates on similar services or goods. Several European countries too have come with their very own amendments while they try to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.
The move of shifting to vat has benefited various European countries as they have witnessed higher revenue collections over the years. However, in a bid to ensure better co-operation between states, vat eu directives and amendments issued by the European Commission have made constant efforts to further improve the system of collecting and refunding vat.