Abstract
Empirical study of specific value added tax problems in selected EU member states is focused mainly on the field of providing services. Specifically services provided to a person from the same EU member state, which shall provide this service immediately further to a customer from other EU member state and further provision of service provided by a provider from one EU member state to a recipient of service from other EU member state are concerned and also these services are connected with immovable property situated in the state of provider of service. These issues are solved in the frame of selected EU states - Czech Republic, Slovakia, Hungary and United Kingdom. The results show insufficiencies in treatment of the mentioned field of value added tax not only at the EU level, but also at the national level of the selected states and application of objective provisions in practice as well. General recommendations of process of elimination of insufficiencies causing problems in providing service further or providing service connected with immovable property are here on this base laid down. Except above mentioned facts, this paper also offers wider view on the harmonization process in the field of value added tax in the EU and highlights the significance of value added tax in the general consequences.
Highlights
The effort to harmonize the taxation systems within the European Union has been from the very beginning connected with the idea of the establishment of the Internal Market
The greatest progress may be attributed to the consensus regarding changes of rules for determining the place of fulfillment in providing services, applying of “one-stop” mechanism for non-settled businessmen providing certain services and the overall modification of process of value added tax refund enabling the application of modern technologies. It concerns Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112/EC as regards the place of supply of services (Eur-lex, 2008a), Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State (Eur-lex, 2008b) and Council Regulation (EC) No 143/2008 of 12 February 2008 amending Regulation (EC) No 1798/2003 as regards the introduction of administrative cooperation and the exchange of information concerning the rules relating to the place of supply of services, the special schemes and the refund procedure for value added tax (Eur-lex, 2008c)
In the opposite case it is evident, that it is a service with the place of the fulfillment in the Czech Republic which is liable to VAT. It is evident from the above mentioned facts, that the regulation of providing service immediately further is not in accordance with the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (Eur-lex, 1977), in the Czech Republic
Summary
The process of the Internal Market establishment subsisted mainly in the removing of the obstacles to the trade, which were represented by the different systems of the indirect taxation and different tax rates applied by the EU member states. In the 1960s two systems of the indirect taxation were applied within the Europe. France was the only state applying value added taxation system and all the other member states were applying cumulative cascade tax system of the turnover tax. Except those two systems of general consumption tax, all the EU member states were applying the systems of selective consumption taxes in the form of excise duties. As the European Commission wanted to harmonize the system of indirect taxation in the European Union as the pre stage of the establishment of the Internal Market, the main task of the European Commission in that time was to decide about the unified system of indirect taxation in the European Union
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