European TAX System and Services
European VAT? Tax is very much important to every government all over the world. Tax plays important role in Government’s income that they can spend it in the welfare of the people. For some countries, Tax is backbone of their economy and interestingly it occupies the large portion of government’s Income. The Tax systems differ from country to country and sometimes even differ from province to province. This tax is having the huge impact on one country’s growth. The tax difference between countries and states is based on their income in other sources and net growth of their income. Most of the countries follow different sets of rules in their country. Some countries impose heavy tax imposition on foreign countries investors who have company in another country.
There are various types of tax imposed on business and also on people and it has the different limitation, different reasons, and different purposes. The taxes like service Tax and income tax are more or less common in all countries. Some taxes like value added taxes are different from each country and most importantly European VAT system is very different from other countries. These Taxes are playing important role in Budget of those countries.
European Tax System
There are Nearly 41 countries in the European Union Including Eurasian part of Russia. Every country in the European Union follows the different type of rates for their taxes. Some countries have high-income tax rate and some countries have very minimum income tax rate. Most of the countries follow this set of rates to make the contribution to the European Union’s budget. The tax rates play important role European Union and each countries contribution is very much needed in European Union budget.
VAT Tax in EU
VAT stands for value added tax which is the tax imposed on goods and services directly and indirectly paid by the customers. There are two types in European VAT system 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. This VAT system was mostly helpful for the business companies and most of the input VAT is attributed to taxable outputs. If the input VAT is excess than output VAT then the government will make repayment to them. But the final consumer didn’t have any benefit.
VAT system in the European Union is different from one country to other including the outgoing United Kingdom. There are different types of Rates are imposed on business by the different countries in the European Union. Some of them have high rates and some of them have the low rate as per the requirements and the minimum VAT tax is 17% collected in Luxembourg and the highest is 27% collected by Hungary. The different between these rates are mainly make an equal or more contribution to European Union’s Budget. There are some exemptions also available for the tax and its tax benefits.
If anyone who runs the business that was not located in the European Union but it has trade tie up with any one of the European countries than that business needs to be VAT registered. As mentioned above VAT tax rates and rules are different from one country to other and European VAT system is one of the most complicated systems in the world and most of the business carrying persons don’t know about which country has which rules and what are the tax rates and what are the exemptions are available. It is never been easy to understand the tax system followed in the European Union. Sometimes doubts and misunderstanding arise and this kind of misunderstanding and doubts are quite natural because there are nearly 50 countries and with 50 different rule how is possible to understand this system but with the help of some service providers the person who runs the business can get any help regarding VAT and other tax. They have years of knowledge about the tax system and they will guide them and provide full functional details about the Tax System followed in the European Union. This TAX system also provides some exemption to certain goods and services.