VAT Tax and Services in European Countries
VAT refund? VAT is one of the many taxes that were applicable in goods and services trading in exports and imports. This VAT tax is different from one country to other. The Rate percentage may differ from one country to other. European countries also impose VAT tax on foreign companies that engages trade with them even the company is not residing in that country. There are certain codes are implied in European Union parliament to collect these VAT taxes and VAT taxes plays a major role in the budget of European Union. But some countries follows the code at the certain limit and they only have the authority to fix the rate percentage at VAT is collected.
VAT Tax Overview
VAT is also commonly called as in some countries as Goods and Service tax shortly GST. This VAT tax is imposed on goods and services in a surplus value added to the product and it is calculated from the each production stage but implemented on destination based tax. That means the location of the customer plays a role in putting the rate for tax. VAT taxes are sharing great space in overall tax value of the country’s revenue and it plays the bigger part in a budget of the particular country. There are two types of tax in VAT and they are credit-invoice and subtraction or account based method. The credit-invoice method is the common method employed most of the countries. In these method sales, transactions are taxed and the customer is notified for VAT and the business or company may receive credit for the transaction. In subtraction method business calculates all taxable sales then subtract it with all taxable purchases and the difference is called VAT tax. Except for Japan, all the other countries uses the credit income method of VAT in their countries.
European Union VAT System
European Union VAT system much differs from the other country’s VAT system. The European Union is a union of nearly 50 countries and all of them have different VAT rate and VAT refund rules. The basic code of taxing is passed by the European Union but it didn’t mention standard tax rate for the countries. The tax rates play important role European Union and each countries contribution is very much needed in European Union budget. There are two types of VAT system is followed in European countries and they are Input Vat and output VAT. Input VAT is the tax paid by the customer who gets the service from the business. Output VAT is paid between two businesses in which one gets the supplies from the other pays the VAT and they are Input Vat and output VAT. Input VAT is the tax paid by the customer who gets the service from the business. Output VAT is paid between two businesses in which one gets the supplies from the other pays the VAT.
Each company has their respective local representative and they are called as the fiscal representative who acts behalf of the company in the tax related matter and this local representative has wide knowledge about the tax rules in their respective countries. Major benefits and rules are known very well to the fiscal representative. There is some VAT refund also given to the company regarding any of their transactions and most importantly that is different from one country to other in the European Union. Some countries don’t give this benefit for certain transactions and other countries give this benefit to reasonable transactions. This causes some much complication and confusion regarding taxation and Tax Benefits. So, every company has their own representative to deals with taxation matters.
Fiscal Representatives are familiar with VAT benefit functionality and they can handle all the benefits and tax-related functions for the business.
Every business needs the good fiscal representative for tax related functions. This representative plays the huge role in Tax related functions for the business. There are many service providers available to provide this kind of good representative and some providers like VACUE provide this for free of cost for the US based companies and the fiscal representative provided by this company is experienced and very well known about tax functions particularly knows about VAT refund scheme and other rules about taxation.