VAT is not a revenue tax. VAT is the tax paid by consumers not by the company. Company only acts as tax collector. The weird thing is this: they collect VAT on everyting they sell, but then, for everything they buy (raw materials, office supplies, etc.) they can substract amount of VAT paid for those from the amount of VAT collected. So purchases by companies are basically VAT-free. And of course some tax optimisation schemes come into play here, with some companies getting ahead on VAT (like, actually getting a VAT refund from the government, instead of paying it).
At least in Spain a company will usually be able to avoid VAT on purchases they make. It is true that they charge and collect VAT on their sales to consumers. The majority off tax paid by these companies is on what they pay their employees.
This is very hard in reality though especially on goods from abroad; your NIE has to be on the invoice officially (which companies like BA do not do for you and I flew with them a lot for business) and while this is not strictly enforced, I got slapped many times on valid business purchases. The gestor told me to just deduct 75% of the deductible vat to not get onto the radar. Ugh.
VAT is not the only tax to be paid in the EU. Not to mention they pay less VAT than the local businesses through various schemes(i.e registering the company that makes the sale in a country with lower VAT)
That doesn't work anymore and it only worked for small volumes, not bigger retailers. They previously needed a VAT number from the state the custumer was in, which was very cumbersome. Now they just add the destination state's VAT on the invoice and I think the VAT is settled between states.
