Principle of Vat Neutrality and the Reverse Charge Mechanism

Famulska Teresa () and Rogowska-Rajda Beata ()
Additional contact information
Famulska Teresa: University of Economics in Katowice, Faculty of Finance and Insurance, Department of Public Finance, .
Rogowska-Rajda Beata: University of Economics in Katowice, Faculty of Finance and Insurance, Department of Public Finance;, .

Financial Internet Quarterly (formerly e-Finanse), 2018, vol. 14, issue 3, 87-97

Abstract: The principle of VAT neutrality is among the fundamental characteristics of this tax. It is implemented through reduction of VAT output by the amount of VAT input. The right of deduction constitutes an integral part of the VAT mechanism and is intended to free the entrepreneur entirely from the burden of VAT paid for the goods and services purchased within the framework of business activity. However, in certain situations it is possible to shift the obligation to pay VAT to the customer being a taxable person by introducing a reverse charge mechanism. The purpose of the article is to identify the relationship between the implementation of the principle of VAT neutrality and the reverse charge mechanism. The conducted analysis of the essence and functioning of the reverse charge and the detailed findings drawn on its basis allow us to conclude generally that this mechanism does not affect implementation of this principle.

Keywords: VAT; input VAT; output VAT; principle of VAT neutrality; reverse charge (search for similar items in EconPapers)
JEL-codes: H21 H25 H32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/fiqf-2018-0022 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:14:y:2018:i:3:p:87-97:n:5

DOI: 10.2478/fiqf-2018-0022

Access Statistics for this article

Financial Internet Quarterly (formerly e-Finanse) is currently edited by Tomasz Skica

More articles in Financial Internet Quarterly (formerly e-Finanse) from Sciendo
Bibliographic data for series maintained by Peter Golla ().