| Abstract [eng] |
Value-Added Tax (VAT) is a tax on the supply of goods and services. VAT was introduced in France on 1957. When the Sixth VAT Directive was adopted in 1977, the final adjustment and harmonization of VAT was reached. In the Republic of Lithuania there is a Value-Added Tax law, which is harmonized with the European Union acts. VAT is an indirect, common, multi-stage, consumption tax. The taxable person have to pay VAT in the national budget for the value, which was created in the production and distribution process. VAT is levied upon the articles of trade before they reach the customer, who eventually pays the tax-inclusive market price. Actually the VAT is pied by the final customer. The right to deduct VAT is the fundamental principle of VAT. All VAT working mechanism is based on this right to deduct. VAT, pied at all stages of production and distribution, have to be deducted by the business participants of the supply-chain. This institute – right to deduct VAT – helps to reach the situation that the payer of the VAT does not suffer a tax, because the final consumer, who is unable to deduct this tax, bears the total VAT. Consequently the fiscal neutrality and fair competition of business participants in the supply-chain is assured. The taxable person, who wants to implement his right to deduct VAT, has to meet the requirements: to do real acts of purchase and sale, formalize it in the invoice or any other accounting document, to be honest and not to abuse the tax laws. The practice of courts shows, that the main problems appear, when the taxable persons, business participants of the supply-chain, do not follow the settled requirements. Therefore the court has to decide – the taxable person can deduct VAT, or this right for that law breaker can be denied. |
