If you wish to begin a fresh business in a European country then you should open a small business in a eu vat state to retain control of your costs. Vat, in principle avoids the pitfalls of double taxation and also should you find yourself paying vat more often than once then you can also obtain a vat refund to recover your money vat number.
Through the years many Countries in europe including Hungary, Germany, Greece, Spain, Italy, UK, Sweden, Poland, etc have shifted to vat or value added tax as a method of collecting tax in a transparent manner whilst plugging tax leaks. The process 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 to your own country. You will however be charged the appropriate customs or excise duties and may also need to pay import vat depending on the classification of the goods. However, once your 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 clear the path to get your personal vat no, charge appropriate vat rates as part of your vat invoice and also present regular vat returns to your tax authorities. You will now truly be a part of your eu vat system.
However, there are many advantages of staying in the europa vat system. If you have imported goods from a member vat country where vat was already charged then you can simply fill out the required 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 in a position to learn all about the latest eu vat rules it would be better when you allow a specialist vat agent to reclaim vat on your behalf.
Your vat agent also needs to file your vat returns in time and also make sure that your vat refund applications are handled within time limit. Most countries in Europe which have adopted vat usually have 3 vat rates. The first is the standard vat rate of around 15 to 25% on most goods. Second is the lower 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 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 going here.
Vat is truly a powerful way to ensure that tax leakage is reduced in a very seamless manner. You too should opt 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 revenue leaks on goods or services where vat has already been charged.