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Tax Policy in Europe

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Introduction

Tax Policy in Europe Netherlands To start a business in the Netherlands, the tax policies would need to be taken into consideration. Before dealing with tax, entrepreneurs would need to know how to start a business. The basic elements at the start would be to create a business plan, find a location, get an apostil stamp or the diploma legalized. Also, business insurance is needed, to cover for any assets and accidents. After all those preliminary tasks are completed, tax would come into play. For an entrepreneur, he or she would have to pay both VAT (Value Added Tax) and Income Tax. At the beginning of a business's life, there would be an assessment by Inland Revenue, to determine if a registration number could be provided. For businesses that earn a very small profit, there could be provisions that allow it to pay very little VAT. In the agricultural sector, if the amount of VAT payable is below �1,883, an amount could be deducted, and if the amount is less than �1,345, it can be completely exempted. There is a special provision that allows the agricultural sector to be exempt from the VAT system. For those who purchase from farmers, there is a deduction of 5.1% from their taxable income. In the Netherlands, businesses must charge its customers VAT, and pay VAT to its purchases as well. If the two sides don't balance out, then the difference is either paid to or returned by Inland Revenue. The end user of a product (for example, consumer who buys a box of chocolates) would not have anything deductable. ...read more.

Middle

You will need to include details of the property's address, the type of property - for example a shop or office - and a plan showing its layout and measurements. If you are renting the premises it is also helpful to provide information about the rent you have agreed. Contacting your local Valuation Office is always a good first step. Alternatively, you may wish to consult an independent professional rating adviser. CHANGES TO THE PERMISES Expanding your business? Thinking about making changes to the building you occupy? Looking to diversify? All of these things can have an effect on your rateable value, which may, in turn, affect the amount you pay in business rates. THE MULTIPLIER The multiplier - also sometimes referred to as the Uniform Business Rate (UBR) - is a key factor in the calculation of your rates bill. It is set annually by central government and determines the percentage (expressed as pence in the pound) of the rateable value of your property that you will pay in business rates. Since 1 April 2005, two multipliers have been in effect. The small business multiplier, applicable to those businesses eligible for Small Business Rate Relief, is set, for 2007/08, at 44.1p. The standard multiplier, which includes the supplement to pay for Small Business Rate Relief, is set, for 2007/08, at 44.4p. If the rateable value of your property was �10,000, your local authority would multiply it by 44.1p (as your rateable value would mean you were eligible for the small business multiplier) to get a total for the year of �4,410. If you are entitled to any transitional arrangements or reliefs, this sum is then adjusted to reflect them, making a final total for your rates bill. ...read more.

Conclusion

If companies have paid more VAT than they have collected, the difference will be refunded to them on request. Exports of goods outside the European Community are completely exempt from VAT. BUSINESS TAXES The tax base is currently calculated on the following values: * The rental value of the premises used by the company for its business * 16% of the value of the fixed assets that the company uses for its business. Tax is then levied on 84% of the sum of these two values at a rate that local communities set each year. No tax is due the year the business is set up.In the second year, tax is levied on only half of the normally taxable amount. The amount of the business tax may not exceed 3.5% of added value produced by the company. New production equipment purchased by the company is not taxed the year of acquisition. Such equipment is taxed at 1/3 its value in the second year, then 2/3 in the third year following its registration on company books. TAX CREDIT FOR INVESTMENT IN NEW TECHNOLOGIES Reserved to small and medium-size companies, this is equal to 20% of investment in new technologies, with a �100,000 cap per 36-month period. NEW COMPANIES Newly created companies located in certain areas may be eligible for a temporary and diminishing corporate income tax exemption. The exemption is total for the first 24 months. After that, tax is levied on one quarter of income in the next twelve-month period, one half of income in the following period and three quarters of income in the period after that. The tax-exempt income is limited to �225,000 in any 36-month period. This measure is restricted to companies engaging in new business and which are not more than 50% owned by other companies. ...read more.

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