| Abstract [eng] |
This master's thesis examines three independent grounds for restricting the right to VAT deduction: abuse of VAT law, VAT fraud committed by the taxable person itself, and participation in fraud through the knowledge criterion. The aim of the research is to reveal the conditions of application and practical problems of application of these grounds. The study employs systematic, comparative, descriptive and document analysis methods. The research demonstrated that the right to VAT deduction is the primary right of a taxable person and the main instrument for implementing the principle of neutrality, however it is not absolute - on the basis of CJEU case law, the Supreme Administrative Court of Lithuania identified three independent grounds for restriction, each of which is sufficient to deny the right to deduction. The analysis of abuse of VAT law revealed two problems of application: the absence of exhaustive criteria allowing abuse to be distinguished from legitimate tax planning, which undermines the principle of legal certainty, and the practice of disallowing the entire VAT deduction without regard to the partial reality of a transaction, which violates the principles of proportionality and neutrality. The analysis of VAT fraud committed by the taxable person itself demonstrated that this ground manifests through deceptive conduct aimed at avoiding a tax obligation, and once the elements of deception and direct intent are established, the right to deduction is denied in its entirety. The analysis of participation in fraud through the knowledge criterion revealed that although a bona fide and sufficiently diligent purchaser is protected from the loss of the right to deduction, the criteria for sufficient diligence are not defined either in legislation or in case law, meaning that the protection of a bona fide purchaser remains not a legal guarantee, but a matter of probability. |
