New Value Added Tax Obligation on Consumers: Examining the Reverse Charge Mechanism in the Finance Act, 2019

2020 ◽  
Author(s):  
Chima Arubike
Keyword(s):  
Value Added ◽  
Value Added Tax ◽  
Reverse Charge

scholarly journals IMPACT OF THE VAT REVERSE-CHARGE MECHANISM ON THE CASH FLOWS OF CONSTRUCTION COMPANIES IN THE SLOVAK REPUBLIC

2018 ◽  
Vol 6 ◽  
pp. 522-528
Author(s):  
Angelika Kútna ◽  
Norbert Gyurián ◽  
Zoltán Šeben
Keyword(s):  
Slovak Republic ◽  
Financial Burden ◽  
Value Added ◽  
Cash Flows ◽  
Business Environment ◽  
Value Added Tax ◽  
Construction Companies ◽  
Study Results ◽  
The Law ◽  
Reverse Charge

In 2015, the Slovak Parliament adopted the Law on Amendments to the Law on Value-Added Tax. This law came into force on January 1, 2016. One of the most significant changes was the introduction of a reverse-charge for the provision of construction works. A government statement of its positive influence on the business environment is inconsistent with the two-year experience in the building sector. The main goal of this paper is to establish the reason for the practical effects of the value-added tax reverse-charge mechanism on the construction companies. The hypothesis is that the negative effect on the cash flows of the construction companies increases ‘opportunity costs’ connected to excessive deductions. The paper focuses on evaluating and quantifying such an effect. It presents a comparison of the conditions before and after the adoption of the Act. No. 222/2004 Coll., as amended in 2016 and includes factors that influence costs and cash flows of construction companies. It but does not consider factors related to turnover and the economic situation.  The reverse-charge mechanism affects the total of tax owing, the total deductible tax, the total excessive deduction, and the construction companies’ cash flows. In this study, the data from the information system of the Slovak Republic, under the condition of anonymity, are analyzed for the period 2014–2017. The effect of the value-added tax is quantified by way of financial interest expenses. These expenses depend on time limits for the excessive deduction, total of tax owing, and on the excessive deduction amount. Indicators of ‘Financial Burden 1’ and ‘Financial Burden 2’ are calculated. The results show that the Law on Amendments of Value Added Tax has significantly affected the constructions companies since January 2016. The reverse-charge system has not changed the delay in excessive deduction payments to the taxpayer’s bank account. It has changed the amount of excessive deduction expressed through money and the total tax owing. Based on the study results, this change markedly affects the financial burden of construction companies and provides an ‘opportunity cost’ Value Added Tax payers‘ construction company.

scholarly journals Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation

2017 ◽  
Vol 9 (1) ◽  
pp. 28-42
Author(s):  
Liza Coetzee ◽  
Marisca Meiring
Keyword(s):  
South Africa ◽  
Critical Evaluation ◽  
Value Added ◽  
The European Union ◽  
Value Added Tax ◽  
Digital Products ◽  
Tax Base ◽  
Competitive Disadvantage ◽  
Foreign Supplier ◽  
Reverse Charge

Effective from 1 June 2014, all foreign businesses supplying digital products such as mobile applications to be used in South Africa are required to register as vendors. This amendment was made to align South Africa with an international trend of bringing cross-border supplies of electronic services into the Value-Added Tax regime. It effectively shifts the Value-Added Tax liability from the importer to the foreign supplier. The reverse-charge-mechanism resulted in an erosion of the tax base and placed local suppliers of digital services at a competitive disadvantage compared to foreign suppliers. This paper critically evaluates the amendment to the Value-Added Tax Act using a literature review. The aim is to determine to what extent the amendments address the shortcomings of the reverse-charge mechanism, are aligned with practices in the European Union and New Zealand and whether they comply with the principles of an effective tax system.

Zvláštní způsoby zdanění a inkaso veřejných rozpočtů u daně z přidané hodnoty

2021 ◽  
pp. 36-50
Author(s):  
Jan Neckář
Keyword(s):  
Standard Method ◽  
Value Added ◽  
Tax Administration ◽  
Special Method ◽  
Value Added Tax ◽  
Reverse Charge

In addition to the standard method of taxation, the Value Added Tax Act regulates two specific methods introduced in order to reduce VAT fraud – the regime of transferred tax liability (reverse charge) and the so-called special method of securing of the tax. In the following text, the specifics of the value added tax administration depending on the statutory (or voluntarily chosen) method of taxation and the related effects on the collection of public budgets will be pointed out. An integral part is pointing out the effects of the chosen method of taxation on tax subjects, either on the part of the supplier or on the part of the customer.

scholarly journals Impacts of the application of the reverse charge mechanism of the value added tax

2013 ◽  
Vol 61 (7) ◽  
pp. 2133-2141 ◽  
Author(s):  
Miloš Grásgruber ◽  
Milena Otavová ◽  
Pavel Semerád
Keyword(s):  
Greenhouse Gas Emissions ◽  
Greenhouse Gas ◽  
Value Added ◽  
Metal Scrap ◽  
Value Added Tax ◽  
Specific Mechanism ◽  
Significant Extension ◽  
Slag Waste ◽  
Reverse Charge ◽  
Construction Works

Reverse charge mechanism is considered to be a specific mechanism when applying the value added tax. The liability to declare and pay the output tax is transferred to the recipient of the fulfillment within the reverse charge mechanism. Since Apri1 1, 2011 there has been extended the application of the reverse charge mechanism to the domestic (home) fulfillments and since this date the mechanism has been applied to the delivery of slag, waste and metal scrap, defined in the Annex 5 and to the trading with the greenhouse gas emissions allowances. Since January 1, 2012 the reverse charge mechanism has been applied also for construction and assembly works which leads to a significant extension of VAT payers which this provision may affect. The paper will evaluate the impacts of the application of the reverse charge mechanism to the provider and the recipient of the taxable fulfillments, mainly for the construction works. There will be evaluated also the impacts of the administrative burden related to the evidence of the reverse charge mechanism for the tax entity and also for the tax administrator.

E -Governance of Value Added Tax System Comparative study with reference to Goa and Kerala

2012 ◽  
Vol 3 (3) ◽  
pp. 3-4
Author(s):  
SUBRAHMANYA BHAT.K.M SUBRAHMANYA BHAT.K.M ◽  
Keyword(s):  
Comparative Study ◽  
Value Added ◽  
Value Added Tax ◽  
Tax System

Collection of Value Added Tax in Kosovo and Its Effect on Economic Growth

2017 ◽  
Vol 8 (1) ◽  
pp. 225
Author(s):  
Teki Shala
Keyword(s):  
Economic Growth ◽  
Descriptive Analysis ◽  
Value Added ◽  
Analytical Techniques ◽  
Value Added Tax ◽  
Statistical Tool ◽  
Revenue Collection ◽  
Strong Positive Relationship ◽  
Level Of Economic Development ◽  
Level Of Significance

The revenue collected from the value added tax constitutes the main income of the Kosovo government. For this reason, this research has a great importance in the formulation of effective policies in Kosovo that will subsequently improve the efficiency of tax collection of Value Added and growing fiscal and budgetary stability. This research it will have a descriptive analysis of the trends of VAT collection in Kosovo from 2005- 2015 years using different analytical techniques to examine trends and data structure over the years. We have used two types of analysis; One is the descriptive analysis of trends and the other is the contrast of the descriptive analysis of trends that is the econometric technique used to analyze the VAT effect on economic growth in Kosovo. The source of data for this study is secondary through the Annual Financial Report of the Ministry of Finance of Kosovo and the IMF. In order to analyze the data generated for the study, the statistical tool utilized is OLS technique (multiple regression). One of the key findings in the collection of VAT has been its dependence on the border. Revenue collection is among the most pressing problems and such situation does not guarantee a country's budgetary stability. Also, based on the findings we noted that the VAT share of the gathering in gross domestic product of the Interior of the country has been low compared to other countries in Europe developing, reflecting a low level of economic development. Also from econometric analysis is confirmed that the regression coefficient shows that we have a VAT impact on GDP in Kosovo, because the level of significance is .000, or includes the rate of 1%. Also, the correlation between VAT and GDP shows a strong positive relationship, or statistically interpreted with the increase of VAT, will increase the GDP of Kosovo, these two elements conclude that VAT has a significant impact on economic growth in Kosovo. Furthermore, this research highlight some key issues that policy makers should consider dealing with the collection and effective use of revenue collected from VAT, to improve growth.

Strategic Aspects of Value Added Tax (VAT)

2007 ◽  
Author(s):  
Arvind Ashta
Keyword(s):  
Value Added ◽  
Value Added Tax
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