If you want to start a new small business in any European country you then should open up a business in a eu vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even should you find yourself paying vat more than once then you can certainly also obtain a vat refund to recoup your money.
Through the years many European countries 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 while also plugging tax leaks. The method has been largely successful and this common way 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 a eu vat state or country and begin importing goods into 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 your goods. However, once your vatvalidation taxable sales cross the vat threshold limit set by the particular eu country you might need vat registration to turn into a vat registered trader or dealer. This will likely clear the path for you to get your own vat no, charge appropriate vat rates as part of 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 many advantages of remaining in the europa vat system. If you have imported goods originating from a member vat country where vat has already been charged you’ll be able to simply fill out the necessary vat form to claim a vat refund. Just in case you or your staff have paid vat during trade shows or on some other services that attract vat then such vat rates can also be claimed back from that country provided all documentary proof is shown. As you might not be able to learn almost allin regards to the latest eu vat rules it will be better if you allow an expert vat agent to reclaim vat in your stead.
Your vat agent also needs to file your vat returns on time as well as make sure 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 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 goods that are vat exempt. If you have paid vat in a foreign country then this is probably large amounts, and recovering this amount can easily reduce your costing and give a much-needed financial injection into your new business.
Vat is really an efficient solution to ensure that tax leakage is reduced in a seamless manner. You too should go for starting a small business in a very vat friendly european country whilst importing services or goods from a member country that also follows vat. By setting up a small business in a eu vat state you can certainly retain control of your costs while plugging your own revenue leaks on services or goods where vat was already charged.