Open up a business in an EU vat state to retain control over your costs
If you want to start a new business in any European country then you should open up a business in an EU vat state to retain control over your costs. Vat, in principle avoids the pitfalls of double taxation and even if you do end up paying vat more than once then you can also apply for a vat refund to recover your money. Over 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 transparent manner while also plugging tax leaks. The method has been largely successful and this common method of charging tax on goods and services has also facilitated smooth imports and exports between countries that form a part of the european vat system. You can start a new business in any eu vat state or country and start importing goods into your own country. You will however be charged the appropriate customs or excise duties and migh also need to pay import vat depending on the classification of your goods. However, once 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 own vat no, charge appropriate vat rates in your vat invoice and also 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 remaining in the europa vat system. If you have imported goods from a member vat country where vat has already been charged then you can simply fill out the necessary 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 be in a position 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 well within the time limit. Most countries in Europe that have adopted vat usually have 3 vat rates. The first is the standard vat rate of around 15 to 25% on most goods. The second is the reduced vat rate of around 1 to 6% on specific goods while the third is goods that are vat exempt. If you have paid vat in another country then this is certainly a large amount, and recovering this amount can certainly reduce your costing and provide a much-needed financial injection into your new business. Vat is truly an efficient way to ensure that tax leakage is reduced in a seamless manner. You too should opt for starting a business in a vat friendly european country while also importing goods or services from a member country that also follows vat. By opening up a business in an eu vat state you can certainly retain control over your costs while plugging your own revenue leaks on goods or services where vat has already been charged.
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