If you want to start a new business in a European country you then 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 even should you end up paying vat more than once then you can also apply for a vat refund to recover your hard earned money.
Over 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 very transparent manner whilst plugging tax leaks. The process has been largely successful and this common way of charging tax on services and goods has facilitated smooth imports and exports between countries that form section of the european vat system.
You can begin a new business in a eu vat state or country and begin importing goods to your own country. You will however pay the appropriate customs or excise duties and might also need to pay import vat according to the classification of the goods. However, once your vat validation 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 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 the tax authorities. You will now truly be a part of your eu vat system.
However, there are many advantages of staying 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 complete the necessary vat form to claim a vat refund. 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 able to learn almost allin regards to the latest eu vat rules it would be better when you allow a specialist vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns in time as well as ensure that your vat refund applications are handled well within time limit. Most countries in Europe that have adopted vat normally have 3 vat rates. The first is the standard vat rate of around 15 to 25% on many goods. The second is the lower vat rate of about 1 to 6% on specific goods while the third is products which are vat exempt. If you’ve paid vat in a foreign country then this is probably large amounts, and recovering this amount can easily reduce your costing and provide a much-needed financial injection to your new business.
Vat is really a powerful solution to make sure that tax leakage is reduced in a seamless manner. You too should go for starting a business in a very vat friendly european country while also importing goods or services from a member country which also follows vat. By opening up a business inside a eu vat state you are able to certainly retain control over your costs while plugging your revenue leaks on services or goods where vat has already been charged.