THE PROBLEMS OF VALUE ADDED TAX TAXATION IN EUROPEAN UNION

Abstract

Abstract. The article deals with the fundamental problems of development and reform of the
value added tax in the EU Member States, the principles and procedures for calculation of value
added tax, as well as the harmonization of VAT in accordance with EU requirements. Disclosed
the economic substance of value added tax, its fiscal nature and disadvantages. Outlined the
main aspects of its perfection in accordance with the requirements of the European Union, have
been discussing the structure of VAT systems in the EU and a wide range of trends in the economy
of the EU for the period 2000-2014 years, analyzed the dynamics of VAT revenue, as well
as changes in VAT rates and tax exemption, which have been transformed in response to economic
challenges or political instability. The article pays special attention on the events that followed
after beginning of the economic crisis in 2008. Reviewed and analyzed the controversial
questions of the VAT reforming in the EU countries, primarily particular collection, feasibility
and possible consequences of the introduction of «reverse» VAT for the certain kind of economic
activities or operations. Subject of a separate discussion are ways to protect bona fide purchasers
of possible involvement in the fraudulent schemes of VAT, and the identification and
disclosure of the concept of VAT Gap.
Key words: taxes, value added tax, tax harmonization, tax exemption, tax break, tax evasion,
«reversible» VAT, VAT Gap.