The Compass Blog
The countries of the European Union (EU) are known for their rich history and diverse cultures. As one of the world’s most powerful trade blocs, the European Union offers abundant business opportunities to those interested in growing their export sales. There are, however, a few pieces of vital information businesses need to know before entering the markets of the EU.
Value-Added Taxes (VAT)
Value-added taxes (VATs) are something to be aware of when wanting to set up locations in Europe. Each European country has a standard VAT of 15% on most goods. Other goods may have a reduced rate but it cannot be lower than 5%. When it comes to exporting goods from the U.S. to the EU it is always a smart idea to check the TARIC. The TARIC is a database with all tariff information on specific goods as well as trade policy of those goods. Knowing the information on exported goods ahead of time will reduce the number of hoops to jump through to get your product in market and will make the export process run smoothly.
Another detail to keep an eye on is the differing styles of government in the nations that make up the EU. The three primary governments are Republics, Federal Republics, and Constitutional Monarchies. All are fairly similar, but one disagreement could lead to high tariffs or an overall restriction on certain goods. Although the 27 counties of the European Union agree to promote democratic values and 19 of those countries share a common currency, the Euro; there are still a variety of rules and regulations that must be followed when exporting each individual country.
Let Us Help You Get Started!
Learn more about the European Union and the geopolitical barriers U.S. exporters may face when entering into these markets at the 2022 World Trade Week Business Conference in Grand Rapids, Michigan on May 4th! The gathering of industry professionals is a great source of information on how to navigate the next normal way of trade. Register today !
About the Author
This blog post was written by Caleb Holland, a freshman student assistant at GVSU’s Van Andel Global Trade Center. He is studying marketing and advertising at Grand Valley and enjoys running, swimming and spending time with friends when he is not working or studying!