If you want to begin a new business in a European country then you should open a business in a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also if you do end up paying vat more often than once then you can certainly also apply for a vat refund to recoup your money vat number.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted over to vat or value added tax as a method of collecting tax in a transparent manner while also plugging tax leaks. The method has been largely successful and also this common method 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 will however be charged the suitable customs or excise duties and may also also need to pay import vat according to the classification of the goods. However, as soon as your taxable sales cross the vat threshold limit set by the particular eu country then you may need vat registration to turn into a vat registered trader or dealer. This will clear the path for you 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 several benefits of remaining in the europa vat system. In case you have imported goods from a member vat country where vat was already 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 any 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 might not able to learn all about the latest eu vat rules it would be better if you allow an expert vat agent to reclaim vat on your behalf.
Your vat agent should also file your vat returns in time and also ensure that your vat refund applications are handled within time limit. Most countries in Europe which have adopted vat normally have 3 vat rates. The very first is the standard vat rate of about 15 to 25% on most goods. The second is the lower vat rate of about 1 to 6% on specific goods whilst the third is products which are vat exempt. If you've paid vat in a foreign country then this is certainly a large amount, and recovering this amount can certainly lower costing and give a much-needed financial injection to your new business vat control.
Vat is truly a powerful solution to make sure that tax leakage is reduced in a very seamless manner. You also should opt for starting a small business in a vat friendly european country whilst importing services or goods from a member country which also follows vat. By opening up a business in a eu vat state you can certainly retain control of your costs while plugging your revenue leaks on goods or services where vat has already been charged.
