Introduced first in France in 1954, VAT or value added tax was slowly implemented in most countries in Europe. in the coming 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 globe usually been dependent on traditional sales tax systems as a means of collecting revenues through taxes. However, the system was not perfect and goods along with services were taxed several times under this system. Vat is relevant every-time specified goods or services www.vatverification.com 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 stay 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 a number of 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 United kingdom has 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat is what is usually charged on most goods and services, which range from 15-25%. Other products or services fall into the lower 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 could be claimed either. Each country has its own vat rate classifications where a large number of products or services are segregated according to their vat rates.
Traders that want to adhere to the vat system have to turn into 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 knowledge 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 need to issue vat invoices mentioning vat rates clearly and even file regular vat returns. However, any vat paid in a foreign country could be claimed back by a trader by opting for vat refunds, which in turn would aid in avoiding double taxation and provide a cash flow boost to the trader?s business.
Vat has been openly welcomed by most eu countries including the UK, and traders can quickly comprehend the system once they become vat registered traders. An expert vat agent on hand may also guide them during calculations and filing of vat returns in order to reclaim any previously paid vat. In matters of tax eu countries have mostly chosen vat and also this unified system helps many traders in these countries to quickly recover previously paid taxes.