In matters of tax eu countries have mostly opted for vat
Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most countries in Europe Http://vatcontrol.com
. in 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 globe usually depended on traditional sales tax systems as a means 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 applicable every-time specified goods or services 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 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 United Kingdom, Portugal, and Austria, amongst others have opted to remain with vat while other countries around the globe too have shifted to this process of collecting taxes on products or services. Although vat rules differ slightly in various countries, the majority of them do remain similar in principle to other countries although vat rates on similar items might differ.
Most eu countries including the UK have 3 basic vat rates which might be charged whenever goods or services are sold. The standard rate of vat is what is normally charged on most products or services, and these range from 15-25%. Other products or services fall into the reduced vat rate of 1-5%, while several others fall under 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 a large number of goods and services are segregated according to their vat rates.
Traders that want to follow the vat system have to turn into vat registered traders in their country. This is often achieved by crossing the vat threshold limit set by their country. In this 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, particularly if they import services or goods from member eu countries into the UK. Once 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 another country may be claimed back by a trader by opting for vat refunds, which often would aid in avoiding double taxation and provide a income boost to 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 on hand 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 this unified system has helped many traders in such countries to quickly recover previously paid taxes.