Most European Union countries have slowly switched to VAT or value added tax on goods and services, and in order to comply with a standard code all eu countries that follow vat need to follow vat eu directives. These directives are amended regularly in a bid to help optimize the system so as to avoid tax leaks and make sure better co-operation among member countries in collecting and refunding vat.
The European Union through its website ec.europa.eu attempts to educate states and vat registered traders in a variety of countries on a number of rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly moved to vatcheck.com/vat the system of vat tax in a bid to improve tax revenues as well as plug tax holes which were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but they are almost similar in principle.
For example, in the UK a trader which has crossed over the vat threshold limit will have to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected from the trader is then adjusted against any vat paid as well as the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues connected to customs duties, excise and vat in the United Kingdom. Similarly, a trader in Poland would need to issue a faktura invoice, which essence is really a vat invoice however in Polish language, and pay vat to the relevant vat department in the country.
Since each country has adopted vat in a slightly different manner by applying varying vat rates to similar products, traders all over Europe usually have to hire a vat agent or vat consultant to help file vat returns regularly. These agents have to be experts in interpreting vat eu rules and vat rules applicable in their country. For instance, a UK trader with vat registration has to appoint a vat agent that is conversant with uk vat rules. In the event that trader imports goods from other vat european countries that have already charged vat on the same then the vat agent of this trader will be able to apply for vat refund in order to reclaim vat back. This method is quite lengthy but can help European traders recover vat amounts previously paid, which inturn can lower their costs and improve their income.
The europa website tries to educate all vat enabled eu countries to adhere to a standard system of vat so as to decrease friction among states as a result of varying vat rates on similar goods or services. Several European countries too have come with their very own amendments as they attempt to adapt completely to eu vat directives for better vat compliance in their country and across borders too.
The move of shifting over to vat has benefited various countries in Europe as they have witnessed higher revenue collections over the years. However, in a bid to ensure better co-operation between member countries, vat eu directives and amendments from the European Commission have made constant efforts to improve the system of collecting and refunding vat.