CYIL vol. 13 (2022)

CYIL 13 ȍ2022Ȏ CURRENT ISSUES OF CAROUSEL INTERNATIONAL TRADE IN THE EU… The purchaser is therefore obliged to declare the acquisition of goods from another Member State in its tax return, to declare the value added tax and to pay the same to its locally competent tax authority and if it uses the acquired goods for its economic activity, i.e., for its realised taxable supplies, then it can declare the entitlement to deduct the value added tax 26 in its tax return as well. If the purchaser specifies the place of taxable supply at the customer’s warehouse, then all related obligations and required documents for future tax proceedings must be specified again already at the conclusion of the business contract, including specification of the VAT tax regimes and also the determination of the tax obligations of all persons involved in this intra-Community transaction (supply) in all Member States. A different situation would arise if the intermediary were a person established in the supplier’s Member State 27 and acquired the goods without transport in the supplier’s Member State, then the supplier would carry out a domestic taxable supply and would issue a normal tax document for the price of the goods subject to the VAT rate in the supplier’s Member State. The intermediary would then file a tax return in the Member State of establishment and it would further carry out the exempt intra-Community transaction (supply) for the purchaser in another Member State. In this case, the purchaser would be in the same evidentiary position and would be subject to the same value added tax obligations as in the previous case. Taxation of profits of the individual parties involved Taxation of profits of persons engaged in triangular transactions is governed by national income tax regulations in the individual Member States, as harmonisation in the area of the income tax has not progressed too much, mainly due to disagreements on the redistribution of shares in the income tax revenues among multinational corporations and groupings carrying out economic activities in multiple EU Member States and countries out of the EU. The European Commission has proposed a Directive on the Common Consolidated Corporate Tax Base “CCCTB 28 ,” which would allow for only one income tax return to be filed for all economic activities carried on within the framework of the European Union and would allow for the offsetting of tax losses realised in some Member States against profits realised in other Member States. The consolidated taxed profits would then be distributed among the individual Member States, which would then tax their share in the profits by using their own income tax rate. This uniform system would act as prevention from tax evasions within the framework of the European Union. In 2021, the European Commission proposed a new vision for the area of taxation. It comes up with a new concept for the taxation of multinational corporations for income 26 In practice, the VAT payers make a mistake very often in the case of taxable supplies received when they suppose that the right to deduct is there always and in full. This is not the case, it is always necessary to allocate the received taxable supply to the taxable supplies made and it is necessary to examine whether the received supply of goods or services is 100% used for economic activity and/or whether the right to deduct must be reduced or applied proportionally, in accordance with the VAT Act. 27 Established person – VAT payer in the supplier’s Member State. 28 CCCTB – Common Consolidated Corporate Tax Base, available from: https://taxation-customs.ec.europa.eu/ common-consolidated-corporate-tax-base-ccctb_en.

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