Introduction - Basic Futures of EU VAT Law

3 important questions on Introduction - Basic Futures of EU VAT Law

What are the basic Features of EU VAT?

  1. It is a general tax on consumption
  2. The tax is exactly proportional to the price of the goods and services
  3. It is levied in all stages of the production and distribution process up to and including the retail trade stage
  4. Taxable persons have a right of deduction

What are the essential characteristics of VAT according to CJEU case law?

  1. VAT applies generally to transactions relating to goods or services
  2. It is proportional to the price of those goods or services
  3. It is charged at each stage of the production and distribution process
  4. It is imposed on the added value of goods and services

What was one of the main reasons for choosing an all-stages tax in the EU?

The advantage of 'fractional payments', spreading the risks of non-compliance over all stages in the production/distribution chain.

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