In matters of tax eu countries have mostly chosen vat
Introduced first in France in 1954, VAT or value added tax was slowly implemented generally in most countries in Europe Vatcontrol.com
. in the future years as well as in matters of tax eu countries have mostly chosen vat is a taxation system that bypasses the perils of double taxation while also ensuring better adherence to tax payments.
Most countries around the world usually been dependent 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 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 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, among others have opted to remain with vat while other countries around the world too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in various countries, the majority 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 which might be charged whenever services or goods are sold. The regular rate of vat is what is normally charged on many goods and services, and these range from 15-25%. Other products or services fall under the reduced vat rate of 1-5%, while several others fall under the zero vat rate category. There are also certain vat exempt goods and services where no vat is charged and no vat can be claimed either. Each country has its own vat rate classifications where thousands of goods and services are segregated according to their vat rates.
Traders that want to adhere to the vat system need to become vat registered traders in their own country. This is often 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 might need to appoint a vat agent with good understanding of eu vat and uk vat rules, especially if they import goods or services from member eu countries to the UK. Once a trader gets vat registration then a business will need 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 opting for vat refunds, which often would aid in avoiding double taxation and provide a cash flow boost for the trader?s business.
Vat has been openly welcomed by most eu countries like the UK, and traders can easily comprehend the system once they become vat registered traders. An expert 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 this unified system has helped many traders in these countries to quickly recover previously paid taxes.