Is your business aligned with the EU VAT rules?
Financial benefits are critical in determining the country where a company needs to be set up. As the main goal of a business is to make profits, the incentives offered by a government makes it all the more attractive to set up business in a particular country. An adequate understanding of the list of European nations that comply with VAT can help save funds. The European Union’s 2010 VAT package simplifies VAT legislation, but adoption of rules by various member states varies, and in some countries the compliance requirements are more aggressive than anticipated. As companies assess the impact of the EU VAT package on their accounts and cash-flow, for most companies it is helpful to keep abreast of the ways various member states deal with the new legislation. A quick glance at several European countries tells us that it is helpful to understand and acknowledge how various countries are dealing with the new legislations.
The Netherlands, Finland and Belgium are among the countries that have not adopted the Use and Enjoyment Rules. (In the new EU VAT package, member states can prescribe Use and Enjoyment)
Austria, Denmark, Germany, Spain and Luxemburg are some of the countries that have adopted the Use and Enjoyment Rules for business to business transactions.
France has adopted the same for business to consumer transactions only.
Romania has introduced new versions of VAT returns.
Cyprus and France have set an aggressive EC Sales List for filing deadlines.
Switzerland requires a revised VAT declaration form from taxable persons registered for VAT.
Keeping your business aligned with the EU VAT rules is necessary as not all EU countries have the same regulations and interpretations. While there are sizable similarities between EU nations, there are also substantial differences that companies need to be aware of before they make any erroneous or risky moves. Although it is important for businesses to track how countries are adopting the legislation, understanding the tax regulations of each country in the region is cumbersome. Ignoring the tax compliance implications of EU Accession or leaving it up to local subsidiaries to address the problem may leave companies open to financial risk and can even put the company’s reputation at stake. Therefore partnering with an expert can help tremendously in understanding the complexities of the EU VAT rules. Professionals have the expertise to guide and ensure a trail blazing success in your international expansion.
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