It's simple, when you pay VAT to another EU country you reclaim the VAT from the local VAT office! this way you will not have the VAT you paid as expanses but just as a short term expanses until you get the VAT amount back. Thats one of the major reason for companies who are trading a lot within the European Union to be registered for VAT - to be VAT registered neutralize the percentage of VAT you pay additionaly. This is also the reason for why it can't be of any benefit to use a Offshore company for instant in the caribbean or Panama to trade in Europe you cant claim the VAT anywhere!!
thank you averagejoe, how to I claim the VAT back, it is clear that I can do that from what I read from your last post, but do I have to maintain some book keeping and report it manual to the VAT office and how is this accomplished?
You need to maintain up to date accounting to be able to report the VAT to the VAT office on a monthly, quarterly or annual basis (Depending on how much turnover you have) this can be done by you personally or you can hire a company to outsource this work which is what most do. Actually each country in the European Union has either Electronic reporting or manual reporting of VAT, not very complicated.