Quick guide to VAT for startups

There are many things to keep track within VAT for startup founders.

Value added tax is paid by all businesses which provide VAT tax-rated goods and services in the EU member states.

The VAT tax rules and legislation can be a pain to understand. Getting your VAT registration right from the beginning is important, as it can save you time, money and resources.

First and foremost, you must find out if your business even needs to be VAT registered. VAT is charged on most goods and services; however some items are exempt from VAT. But even if the goods and services you sell are zero-rated, such as food and children’s clothing, your business must still be VAT registered.

The process of VAT registration can be further complicated if your company does business that is taxable in other countries, as they will have different rules and rates for different items.

Recovering your VAT

As a result of a growing global market, many international businesses face the challenge of multiple foreign VAT invoices and the need to reclaim VAT from countries with a different VAT legislation to your own.

Although foreign VAT is dealt with electronically within the EU, the process of VAT recovery may still be complicated by things such as language confusion, local regulations, differing application periods and varying VAT codes. Therefore, VAT management can confuse even the most experienced finance teams.

Our Vathub consultants have extensive experience with VAT legislations of more than 30 countries both within and outside the EU, and can make use of a widespread network of VAT experts locally and globally. Thus, you will only require one Vathub contact for all countries.

In the case that you employ Vathub to handle your VAT recovery, we will first examine and prepare your data for processing, where after we contact the suppliers from which the invoice was issued. We will manage all correspondence with the supplier and any authorities, and if any appeals or reviews occur, we will take full responsibility. After the VAT recovery has been taken care of, Vathub will issue out a financial report for you to keep.

We understand that letting someone gain this much insight into matters that are private to your business requires immense amounts of trust, and therefore you will only find the most experienced and respected consultants, who always work under confidentiality, at Vathub

Prepare for being audited

Naturally, VAT registration and recovery are not the only aspects of VAT management.

One of the most important tasks for you as a business is to keep correct and up to date track of all your input and output tax. Some of your input tax may need to be claimed in foreign countries at different rates, and it is thus important that you maintain an overview of the different rules of VAT.

If your VAT record is incorrect, you are not only at risk of losing money but it may be regarded by tax authorities as an attempt of tax fraud. In the case of an incorrect or inadequate VAT record, a VAT audit will be a stressful and unpleasant experience.

Vathub can help you become a VAT expert. You may desire to be independent of external VAT consultants and manage your VAT without any outside help. We know that anyone can become a VAT expert, and we are passionate about sharing our expertise and experience. Vathub offers extensive VAT tax training courses, teaching you all you need to know in order to handle your own VAT management with confidence.

Don’t have the time? Vathub can handle your on-going VAT management for you, and if you wish, you may have your VAT consultant present during the VAT audit in order to best answer any questions about your VAT record that the VAT officer might have. In the case that the VAT officer has any feedback or suggestions for improvement of your VAT record, Vathub can help you implement these changes efficiently.