№ 3/2022

Fìnansi Ukr. 2022 (3): 22–37https://doi.org/10.33763/finukr2022.03.022

TAX POLICY

VALIHURA Volodymyr ¹

¹ West Ukrainian National University
OrcID ID : https://orcid.org/0000-0001-5114-3886

Current trends of VAT harmonization in the EU countries

Introduction. Socio-economic realities related to VAT fiscal losses, the spread of the 2008 global financial crisis and the economic crisis caused by quarantine restrictions due to the spread of COVID-19 and the consequences of economic sanctions in response to Russia's military aggression against Ukraine have slowed VAT harmonization in the EU countries.
Problem Statement. The study is devoted to the issue of establishing preconditions and assessing prospects for new initiatives related to VAT harmonization in the EU countries.
Purpose. Coverage of retrospectives, current trends and assessment of prospects for further harmonization of VAT in the EU countries.
Materials and Methods. The following general and special methods were used in the research process: analysis, synthesis, grouping, description, comparison, theoretical generalization and abstract-logical.
Results. The legislative features of regulating VAT harmonization based on the EU Council Directives are emphasized. The directions of coordination of the VAT administration policy at the Community level are systematized. Retrospectives of forming approaches to establishing the principle of VAT collection, according to which trade in the EU countries should take place, are analyzed as well as indicators of gaps in VAT revenues in the EU countries. The essence of the finalized system of VAT administration in the EU, based on the principle of the destination country, is revealed and the prospects of its implementation are assessed. The peculiarities of the new rules of VAT collection on cross-border e-commerce transactions between business and consumers (B2C) are considered. The current trends in setting VAT rates in the EU countries are highlighted and the prospects for their further harmonization are outlined.
Conclusions. The final decision on the introduction of a finalized VAT system for intra-EU trade depends on the effectiveness of VAT on cross-border e-commerce between business and consumers (B2C), which was introduced on 1 July 2021 and is determined by the impact of economic sanctions on the EU market concerning the Russian Federation. Changes in the taxation of e-commerce in the EU may cause the rejection of online marketplace customers from the goods of Ukrainian sellers, and the reorientation to European goods.

Keywords:harmonization of VAT, gaps in VAT revenues, principles of VAT collection, finalized VAT system, harmonization of VAT rates

JEL: F36, F42, H21, H22, H25

Valihura V. . Current trends of VAT harmonization in the EU countries / V. . Valihura // Фінанси України. - 2022. - № 3. - C. 22-37.

Article original in Ukrainian (pp. 22 - 37)

Download

Downloads :94

1. Garkushenko, O. M., & Filippova, N. V. (2016). Directions of VAT rates harmonization to European ones: issues and challenges. Economy of Industry, 3, 80–89 [in Ukrainian]. doi.org/10.15407/econindustry2016.03.080
2. Dmytriv, V. I. (2018). Value added tax and its harmonization with the provisions of the European Union. Economy and customs and legal relations, 5, 36–43 [in Ukrainian].
3. Iefymenko, T. (2014). Actual problems of modern strategies of tax system reforming. Finance of Ukraine, 1, 105–122. Retrieved from finukr.org.ua/?page_id=723&aid=684.
4. Konina, M. O., Rekha, K. H., & Tuzova, K. H. (2016). Problems of harmonization of Ukrainian value-added tax legislation to requirements of European Union. Market Infrastructure, 2, 279–282. Retrieved from www.market-infr.od.ua/journals/2016/2_2016_ukr/57.pdf [in Ukrainian].
5. Krysovatyi, A. I., & Valihura, V. A. (2010). Dominants of tax harmonization: national and international vectors. Ternopil: Textbooks and manuals [in Ukrainian].
6. Krysovatyi, A. I. (Ed.)., Melnyk, V. M., & Koshchuk, T. V. (2014). Tax transformations in the EU and tax policy of Ukraine in the context of European integration. Ternopil: TNEU [in Ukrainian].
7. Rainova, L. (2017). Experience of approximation of Poland’s tax legislation to EU directives. RFI Scientific Papers, 4, 143–156 [in Ukrainian]. doi.org/10.33763/npndfi2017.04.143
8. Sokolovska, A. (2021). Contradictions and problems of harmonization of value added tax rates in the EU. Finance of Ukraine, 3, 23–45 [in Ukrainian]. doi.org/10.33763/finukr2021.03.023
9. Filippova, N. V. (2016). Directions of VAT rate harmonisation in Ukraine in context of international trade relations. Economy of Industry, 2, 49–73 [in Ukrainian]. doi.org/10.15407/econindustry2016.02.049
10. Wilson, E. (2019, May 23). EC Urged to Roll out a Common Definitive VAT System for Services and Goods. Retrieved from www.mondaq.com/uk/sales-taxes-vat-gst/853022/ec-urged-to-roll-out-a-common-definitive-vat-system-for-services-and-goods.
11. Godar, S., & Truger, A. (2017). Shifting priorities in EU tax policies: A stock-taking exercise over three decades. IMK Study, 55, 28–30. Retrieved from www.econstor.eu/handle/10419/191726.
12. Jones, A. (2020, July 16). EU moves one step closer to DAC7 with anti-fraud tax package. International Tax Review. Retrieved from www.internationaltaxreview.com/article/b1mj9bdwgrs3xv/eu-moves-one-step-closer-to-dac7-with-anti-fraud-tax-package.
13. Keen, M. (2013). The anatomy of the VAT. National Tax Journal, 66 (2), 423–446. doi.org/10.17310/ntj.2013.2.06
14. Oręziak, L. (2020). The Evolution of the Process of the Harmonization of Value Added Tax (VAT) Within the European Union. Studia Europejskie – Studies in European Affairs, 4, 93–108. DOI: 10.33067/SE.4.2020.5.
15. Janssen, A. (2021). European Union – The Problematic Combination of EU Harmonized and Domestic Legislation regarding VAT Platform Liability. International VAT Monitor, 32 (5). Retrieved from www.ibfd.org/shop/european-union-problematic-combination-eu-harmonized-and-domestic-legislation-regarding-vat.
16. Poniatowski, G., Bonch-Osmolovskiy, M., & Śmietanka, A. (2021). VAT Gap in the EU. Report 2021. Luxembourg: Publications Office of the European Union. Retrieved from op.europa.eu/en/publication-detail/-/publication/bd27de7e-5323-11ec-91ac-01aa75ed71a1/language-en/.
17. European Commission. (2021, December 2). VAT Gap: While gap continues to decrease, EU countries lost €134 billion in VAT revenues in 2019. Retrieved from ec.europa.eu/commission/presscorner/detail/en/ip_21_6466.
18. Council conclusions on the future of VAT (3167th Economic and Financial Affairs Council meeting). (2012, May 15). Retrieved from www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/130257.pdf
19. European Commission. (2016). Towards a single EU VAT area – Time to decide (Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on an action plan on VAT (COM (2016) 148 final)). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2016%3A148%3AFIN.
20. European Commission. (2015). A Digital Single Market Strategy for Europe (Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions (COM(2015) 192 final)). Retrieved from eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015DC0192&from=FI.
21. European Commission. (2020). VAT rates applied in the Member States of the European Union. Situation at 1 st January 2020 / Retrieved from ec.europa.eu/taxation_customs/system/files/2020-10/vat_rates_en.pdf.