In matters of tax eu countries have mostly chosen vat
Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries Www.vatcontrol.com
. Within the coming years and in matters of tax eu countries have mostly opted for vat is a taxation system that bypasses the possible risks with double taxation while also ensuring better adherence to tax payments.
Most countries around the world usually depended on traditional sales tax systems as a way of collecting revenues through taxes. However, the system was not 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 tax amount once they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure that traders provide all vat details thus to their respective vat departments.
Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, amongst others have opted to remain with vat while other countries around the world too have shifted to this process of collecting taxes on goods and 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 UK have 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat ‘s what is normally charged on many goods and services, and these range between 15-25%. Other products or services fall under the reduced vat rate of 1-5%, while several others fall into the zero vat rate category. Additionally, there are certain vat exempt products or services where no vat is charged and no vat can 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 want to follow the vat system need to become vat registered traders in their country. This can be achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, especially if they import services or goods from member eu countries into the UK. When a trader gets vat registration then a business will have to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in a foreign country may be claimed back by the trader by choosing vat refunds, which in turn would help avoid double taxation and give a income boost for the trader?s business.
Vat continues to be openly welcomed by most eu countries including the UK, and traders can easily comprehend the system once they become vat registered traders. A professional vat agent readily available may 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 chosen vat and also this unified system has helped many traders in such countries to quickly recover previously paid taxes.