Alliance Importance and Risk Cases of Value Added Tax Threatening Continuity of European Budget

Olga Burianova, Jiri F. Urbanek

University of Finance and Administration, Estonska 500, 10100 Prague 10, Czech Republic.

Abstract: One of the three major pillars of funding the European Union’s budget is Value Added Tax. Within the European Community, under the terms of the legislation, trade in goods and services under the so-called reverse charge system operates. One of the reasons why this method of taxation has been applied is to avoid risks in the area of Value Added Tax collection. Some countries of the European Union have accepted this form of taxation and transferred them to risky commodities into the domestic Tax on Value Added Tax and its collection of Value Added Tax. However, also in this mode of taxation may lead to the avoidance of taxation and the tax fraud. The free movement of goods, services and taxpayers or taxpayers without Value Added Tax registration within the European Community may cause some difficulty in correctly selecting value added tax. The security of the tax collection to funding into the budget can be endangered. However, the correct implementation of the budgetary plans (prediction) should be in the interest of all, because the budget supports the important infrastructure areas of the countries concerned. And in this respect, is knowledge of social responsibility important. The aim of this article is to point out this danger in a simple example. The exquisite instrument, for the achievement of this paper’s aim, is the application of special modelling and simulation methodology for crisis scenarios – method DYVELOP (Dynamic Vector Logistics of Processes).

Keywords: Value Added Tax, European reverse charge, Crisis scenarios, Dynamic Vector Logistics of Processes, Tax Fraud.

Pages: 1 – 12 | Full PDF Paper