Most European countries have adopted vat or value added tax as a method of taxing goods and services and you should certainly learn all about exempt vat category in european states. Most countries exempt vat from certain goods or services that could pose a financial burden to the public or to needy people.
It is important that you learn all about vat rates including vat exemption in case you plan to start a business in any European country. This move will help you to slot your products correctly in the designated vat classifications, which in turn will help improve the bottom-line of your business. Once you start your own manufacturing or trading business and import goods or services into your own country then you will have to pay customs and excise duties based on the type of imports. When you cross the vat threshold limit set up by your country then you will also need to get vat registered so that you can start charging vat through a vat invoice. The threshold limit varies in different eu states and in the UK the limit of £70,000 is achieved when your taxable sales cross that amount in the past 12 months.
However, before you start charging vat to your clients you also need to find out about existing vat rates in your own country as well as in other countries. Thus, knowledge about eu vat as well as uk vat is crucial, especially if your business is situated in the UK. Most countries have 3 different categories of vat. Almost all products and services fall under the standard vat rate that varies from 15-25%. Then there are certain products and services that fall under reduced vat rates that vary from 1-6%. The final vat rate is a zero vat rate where no vat is charged by the seller although any vat, if previously paid on that product or service can be refunded with a vat reclaim.
There are also certain goods and services that usually come under the purview of social services or obligations and usually qualify as exempt vat. Although there might some element of hidden vat inside these goods or services, buyers or sellers cannot claim any vat back on them. In most countries services such as insurance, banking, medical including hospitals, education, and social security, among others have exemption from vat.
In addition certain products such as postage stamps, medical equipments, and even lotteries or gambling services are exempt from vat. If your range of activities or imports falls under any of these sections then you would be exempt from paying or collecting any vat although you might also not be able to ask for a vat refund if vat has already been paid for the same in another eu country.
If you have trouble in finding out vat rates in various countries including your own or have trouble in filing your vat returns then you should certainly hire a professional vat agent that is also conversant in the latest customs, excise and vat rules. This will help you to learn all about exempt vat category in european states, which in turn could also prove to be beneficial for your business.