Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most European countries vatcontrol-com
. in the coming years as well as in matters of tax eu countries have mostly opted for vat is a taxation system that bypasses the perils of double taxation while also ensuring better adherence to tax payments.
Most countries around the globe usually been dependent on traditional sales tax systems as a way of collecting revenues through taxes. However, the system wasn’t perfect and goods as well as services were taxed multiple times under this system. Vat is relevant every-time specified services or goods change hands and vat registered traders simply get back the paid amount of taxes once they issue a vat invoice to their clients and collect the tax back. Regular vat returns make sure that traders provide all vat details to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to stay with vat while other countries around the globe too have moved to this method of collecting taxes on products or services. Although vat rules differ slightly in various countries, most of them do remain similar in principle to other countries even though vat rates on similar items might differ.
Most eu countries such as the United kingdom has 3 basic vat rates that are charged whenever services or goods are traded. The standard rate of vat ‘s what is normally charged on many goods and services, and these range from 15-25%. Other products or services fall into the lower vat rate of 1-5%, while several others fall into the zero vat rate category. There are also certain vat exempt products or services where no vat is charged and no vat could be claimed either. Each country possesses its own vat rate classifications where thousands of goods and services are segregated according to their vat rates.
Traders that are looking to follow the vat system need to become vat registered traders in their own country. This can be achieved by crossing the vat threshold limit set by their country. In this particular vat tax eu countries too have various threshold limits and traders should appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import services or goods from member eu countries into the UK. Once a trader gets vat registration then the business will have to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country could 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 understand 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 has helped many traders in these countries to quickly recover previously paid taxes.