War on the VAT mafia is an extremely popular slogan for some time. Someone who is not inquisitive could consider that it is a very harmful pathology which occurs only in Poland. The truth is a little more prosaic. Tax carousels and VAT recovery are happening in all EU countries.
The activities of the so-called VAT mafias over Vistula could only develop at the time of joining the community. Before 2004 It would be much harder. Who's guilty then? It can be said that he has failed to predict the future in the course of law-making.
one The EU is founded on a common market and free movement of goods and services. Such an assumption favours a modern and healthy economy. Unfortunately, ideal assumptions sometimes break into very mundane phenomena.
In which country to pay VAT
VAT generates the most revenue to the state budget. More than any other tax. That's what we all pay for every shopping in the supermarket. We may not pay attention to the amount of VAT shown on the receipt, but it is worth knowing that it is this sum that powers the state treasure rather than the seller. Of course, assuming everything is legal. In practice, the entrepreneur may not pay VAT to the tax office or even apply for a refund of VAT that is not due to him.
The risk of tax fraud always exists, but as long as purchases and sales take place in the same country, the whole process is more predictable. Things get complicated if the seller and the recipient are entrepreneurs from different countries. This creates a real chance for "tax carousel" crimes.
Intra-Community does not mean fair
VAT is assumed to be charged to the consumer, not to the trader's income. For this reason, it should be settled in the country of the buyer rather than the seller. There seems to be nothing here to raise suspicion. In practice, the sale of goods from Poland to the Czech Republic poses a much greater risk of VAT disappearing than in the case of the same operation between entrepreneurs and one The country.
Moreover, friendly entrepreneurs from different EU countries can create a tax carousel that defrauds VAT returns. Trade in goods is only illusory. Roundabouts are created interstate, not intrastate one The country. The temptation to easily earn a refund of VAT is too strong for some to resist.
A mechanism to break the carousel
EU Commissioner Pierre Moscovici estimates that the scale of VAT fraud is 50,000,000,000 EUR A year. It follows that the European Union is losing an amount similar to the average budget each year.
The EU Commissioner is proposing a Europe-wide reform that will reduce the loss by 80%. If that happens, the community should gain some 40,000,000,000 EUR Every year. It intends to achieve this by patching up a key hole used by pseudo-entrepreneurs.
The above mentioned example of selling goods from Poland to the Czech Republic should enrich the Czech Republic's tax side. But everything is divided into two the stages and the gap between them significantly facilitates embezzlement. Buying and selling become separate events, and the buyer has a lot of room for manoeuvre if he wants to deceive the tax office.
The European Commission intends to create a single EU VAT area. Turnover between different EU countries will be based on new rules. EC announces a departure from the construction of “artificial division one trade (...) cross-border trade in goods will be defined as one taxable supply’.
Rescue announcement 40,000,000,000 EUR She's very ambitious. The EC also hopes that its assumptions are merely an introduction to the creation of a pan-European foundation for a secure and secure VAT system. Time will tell if such a vision becomes reality.