In vat europe leads the way

Several countries around the globe have adopted vat or value added tax in a bid to increase tax revenues and the US too is thinking about adopting this system of collecting tax but in vat europe leads the way. Most European countries follow the system of vat and even have a common eu vat system that is to be followed by all member countries that have adopted vat.

European countries that have embraced vat include Poland, Germany, Spain, Greece, Sweden, the UK, Ireland, Portugal, Romania, and many more. Each european country requires traders to turn into vat registered traders before they can receive a vat certificate and issue vat invoices. Once a trader gets vat registration then the business also needs to account for input and output vat through regular vat returns that need to be filed at the required intervals based on the chosen vat scheme in that country.

The Eurpoean Commission or Europa monitors the overall implementation of vat in all vat enabled countries and has also issued various directives that guide member countries towards better integration in implementing vat. These directives also helps vat traders to apply for and receive vat refunds for vat already paid in another eu country. Each country also has its own version of vat invoice that still requires traders to display the vat rate, vat amount and total gross amount, although some countries are allowed to issue invoices in their own language. For example, in Poland, vat registered traders issue a faktura invoice, which is basically the same as a vat invoice issued by a similar trader in the UK, albeit in a different language.

While each country implements vat by following the common vat code, it also allows traders to go in for vat refunds on imported goods and services where vat has already been paid in the country of origin. With such rules of vat europe has made it easier for traders to avoid the problem of double taxation and recover the money from a member eu country within a period of 4 to 8 months. Most traders in vat enabled countries do employ a vat agent or consultant to help them calculate vat rates, file vat returns regularly, and apply for vat reclaim on their behalf. This enables them to pursue sales while leaving the taxation side to vat experts.

The European Commission has also instructed member countries to set standard vat rates between 15 to 25% while also trying to make them to arrive at a consensus in reduced vat rates as well as zero vat rates and vat exempt goods and services to reduce discrepancies between member countries. Several countries have also raised or are on the verge of raising vat rates in the coming year that were either lowered during the recession or simply in a bid to increase revenues.

Although vat has been slowly gaining popularity around the globe, the European Commission has ensured that their large flock of vat enabled European countries slowly gets in tune with each other as they try to follow a common code of vat. In vat europe truly leads the way in showing other countries as to how to successfully implement a common system of vat across geographical borders.