Most EU countries have slowly switched over to VAT or value added tax on services and goods, along with order to abide by a common code all eu countries that follow vat need to follow vat eu directives. These directives are amended regularly in a bid to further optimize the system so as to avoid tax leaks and make sure better co-operation among states in collecting and refunding vat.
The European Union through its website ec.europa.eu tries to educate states and vat registered traders in a variety of countries on a number of 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 moved to the system of vat tax in a bid to raise tax revenues and also to plug tax holes vatvalidation.com/vat which were previously draining precious resources. Each vat enabled country possesses its own interpretation of european vat or europa vat rules that might vary slightly but are almost similar in principle.
For example, in the UK a trader that has crossed over the vat threshold limit will need to turn into a vat registered trader before issuing any vat invoice. The following vat collected by the trader is then 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 connected 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 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 over Europe usually have to hire a vat agent or vat consultant to help file vat returns regularly. These agents need to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration has to appoint a vat agent that is 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 this trader should be able to file for vat refund in order to reclaim vat back. This process is pretty lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and enhance their income.
The europa website attempts to educate all vat enabled eu countries to adhere to a common system of vat so as to decrease friction among member countries as a result of varying vat rates on similar goods or services. Several countries in Europe too have come with their own amendments as they attempt to adapt completely to eu vat directives for better vat compliance in their country and across borders too.
The move of shifting to vat has benefited various European countries as they have witnessed higher revenue collections over time. However, in a bid to ensure better co-operation between member countries, vat eu directives and amendments issued by the European Commission have made constant efforts to further improve the system of collecting and refunding vat.