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VAT & Excise

VAT
Introduction
VAT as well as customs duties, landfill tax, insurance premium tax and the other indirect taxes affect every business. Timely planning can produce financial savings. We can help your business by providing advice and help on any indirect tax matter or problem - often producing savings where none may have seemed possible before.

The financial cost of getting VAT wrong often brings anxiety, puts budgets under pressure, and can, in extreme cases, put the survival of the business in danger. The increasing regulatory burden imposed by the Financial Instruments Exchange Law (“J-Sox”), Sarbanes Oxley Act 2002 in the US and the adoption of similar rules by fiscal authorities in other countries means that there will be ever greater focus on the governance, risk and compliance agenda.

Our consultants can help you maximise opportunities, minimise costs, assess compliance risks and resolve problems with any of the indirect taxes. There is no need to adopt aggressive and risky tax planning strategies to make savings - we can often help to optimise your tax position without risking a confrontation with the tax authorities.

With experts located throughout the EU, we aim to turn a tax burden into a competitive advantage.

The international movement of goods implies “crossing borders” and therefore securing your customs compliance and paying the appropriate taxes.

What is VAT?
Value-added tax (VAT) is the largest single source of indirect tax revenue in European Union countries. VAT applies to most sales of goods and services; in effect, it is levied on the value added at each stage of the production and distribution chain, as well as on imports. Companies act as VAT collectors, paying to the tax authorities the tax recoverable from their customers (output tax) and receiving a credit for the tax they pay to suppliers (input tax). Thus VAT is offset at each stage until the goods or services reach the final consumer or an exempt business.

All businesses must register for VAT if their taxable turnover exceeds a certain threshold.

There is a different mechanism for levying VAT on goods from EU countries. Cross-border shoppers and travellers are free to import goods having borne VAT in the country of purchase. Businesses continue to pay VAT in the country of final consumption (the destination principle), but because all fiscal controls have been transferred from the border to the national fiscal authority in each EU member state, suppliers must submit to their national fiscal administration a list of the total sales to each of their buyers in other EU states on a quarterly or monthly basis (European Sales List or recapitulative statement). EU Arrivals and Despatches declarations are made through Intrastat on a monthly basis if the annual threshold is exceeded; otherwise, declarations are not required.

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