VAT

Imagine you are running a business. You have a small business or a trade, and you are doing just enough to maintain the same standard of living across challenging times. Then suddenly, without any increase in your income compared to the prices around you, the state tells you that you are already earning enough to pay more in taxes.

Lithuania ranked ninth in the International Tax Competitiveness Index 2023. This country ranked eighth last year and fourth in 2019. Why is it sliding down instead of finally rising up the pedestal? The International Tax Competitiveness Index assesses tax systems on their simplicity, transparency, neutrality - i.e., fairness to specific activities and income levels - and stability.

The wording of the drafted law does not provide sufficient guarantees for the exclusive application of the reduced rate for the declared taxable product supplies only. The proposal was made without an in-depth analysis by the National Revenue Agency.

The current legal system governing the interface between business and state administration is far too complicated, and interpretation of the law often depends on individual decisions of the tax authorities and courts. In order to function in this thicket of regulations, highly paid advisors are needed.

The definition of small and medium enterprises (SMEs) is an important issue, regarding not only a number of European policies that have been set up to ensure these SMEs benefit from financial support, fee reduction, reduced administrative burden, etc.

The VAT base in Poland has its weaknesses due to both domestic and EU polices. National authorities overuse reduced rates, making the VAT system too complicated and problematic for businesses while a zero rate on intra-EU trade incentivizes fraud.

Possibility to set statutory VAT rate below 15% for a wider set of different goods and services may lead to lower effective VAT rates in various Member States. Therefore, countries, which have fewer exemptions and/or reduced rates, may maintain the same principles of taxation but lower their standard VAT rate.

Ukrainian exporters say that inefficient and non-transparent VAT refunds system and high levels of bureaucracy are the biggest obstacles for export. The survey also reveals that smaller enterprises tend to be more burdened by complicated customs procedures and lack of transparency in the operation of tax agencies.

Fiscal policy is not just about taxation. And, moreover, the ongoing debates often miss actual numbers. And what are the actual recent fiscal numbers in the Czech Republic? Let\'s look into that.

Ukraine introduced value added tax (VAT), which is one of the essential sources of fiscal revenues in many countries, in 1992. The tax became important for Ukraine’s economy as it brings about one third of consolidated fiscal revenues and accounts for near 10% of GDP. However, with years the tax became known for poor administration and fraud. Some loopholes in the administration relate to numerous VAT privileges and exemptions.