How I can reduce my VAT payments

EU VAT MITIGATION

SCF Legal & Corporate Management Services Limited is in a unique position to advise both individuals and companies on how to reduce, defer or otherwise mitigate their VAT obligations. Obviously, VAT needs to be paid but as the table below shows the rates vary considerably from one jurisdiction to another – In addition, the EU has sanctioned ‘special’ rates for what are known as the ultra peripheral regions (UPR’s) which include Madeira where the SCF Group has an affiliate company Hibernian Trust e Management Lda – In the case of Madeira, the VAT rate is only 15% whilst companies giving employment in the region can also benefit from very favourable corporate tax rates.

How we can save you VAT and/or increase Cash Flow!

Apart from the transferring some and/or all-corporate activity to a low VAT and corporate tax environment it is also possible to help cash flow by simply changing suppliers to those based outside of ones home country since current EU rules mean that if two EU companies are registered for VAT then neither has to pay or reclaim VAT! Other pro-active VAT saving ideas include setting up VAT registered companies to reclaim back VAT on property investments – For example, rather than simply investing in property where there is a VAT charge as in Spain, it may make better sense to actually develop a property from scratch as VAT could then be reclaimed. For those wishing to purchase a yacht to use in EU waters it might be worth considering using it for business purposes and/or setting up a charter company both with the purposes of reclaiming back VAT. For information on how SCF may be able to assist you or you firm save/mitigate VAT please consult one of our consultants

VAT & Corporate Tax Rates within the European Union (EU)

The SCF Group is very much based and aimed at helping business within the borders of the European Union. As such, we have garnered much experience of exploiting the variable tax systems, VAT and corporate tax rates and in particular eclectic tax concessions available in the different member states together with our knowledge of using the various beneficial EU ‘Directives’ and ‘Regulations’: Particularly the EU Parent Subsidiary Directive 90/435 which, in specified circumstances*2, allows dividends to be distributed from one EU member state to another EU member state without any withholding taxes.

Standard European Union Corporate Tax & VAT Rates

European Union Corporate Tax Rates
Country	Corporate Tax Rate (s)	Standard VAT Rate (s)	Beneficial Tax Regime for Individuals?	Overall Rating 1-10
Austria	34%	20%		5/10
Belgium	33.99%	21%		5/10
Bulgaria	15%	19%		7/10
Cyprus	10 - 15%	15%	☺	9/10
Czech Republic	28%	19%		6/10
Denmark	30%	25%		4/10
Estonia	12.5%	18%		9/10
Finland	29%	22%		6/10
France	34.33%	19.6%		5/10
Germany	34.33%	16%		6/10
Greece	25% - 35%	19%		5/10
Hungary	16%	20%		7/10
Ireland	12.5%	21%	☺	10/10
Italy	37.25%	20%		4/10
Latvia	15%	18%		9/10
Lithuania	13% - 15%	18%		9/10
Luxembourg	30.38%	15%		7/10
Malta	35%	18%		6/10
Netherlands	29% - 34.5%	19%		6/10
Poland	19%	22%		6/10
Portugal	27.5%	21%		4/10
Romania	25%	19%		5/10
Slovakia	19%	19%		7/10
Slovenia	15%	20%		8/10
Spain	35%	16%		5/10
Sweden	28%	25%		5/10
United Kingdom	19% - 30%	17.5%	☺	8/10

*1 = Hibernian Trust e Management Lda is a fully licensed company and trust management firm registered with the regulatory SDM Body Certificate Number 511125828
*2 = Directive 90/435 only applies where there is a participation exemption whereby at least 25% of the equity of the subsidiary is owned by the parent company plus a number of other conditions