Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries vatcontrol-com
. in the future years as well as 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 globe usually depended on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn’t perfect and goods along with services were taxed multiple 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 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, amongst others have opted to remain with vat while other countries around the globe too have shifted to this process of collecting taxes on goods and services. Although vat rules differ slightly in various countries, most of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates which might be charged whenever goods or services are traded. The standard rate of vat ‘s what is normally charged on many goods and services, which range between 15-25%. Other goods and services fall into the reduced vat rate of 1-5%, while several others fall under the zero vat rate category. There are also 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 thousands of products or services are segregated in line with their vat rates.
Traders that want to follow the vat system need to turn into 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 might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, particularly if they import goods or services from member eu countries to 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 another country may be claimed back by a trader by opting for vat refunds, which in turn would help avoid 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 comprehend the system once they turn into vat registered traders. A professional vat agent readily available can also guide them during calculations and filing of vat returns so as 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 such countries to quickly recover previously paid taxes.