Value Added Tax Flashcards
1
Q
Why is Value Added Tax said to be cost neutral ?
Whats a precondition for that?
And which problem arises with that?
A
- within the supply chain cost neutral
- input VAT completely reverses the VAT imposed on any previous stage of the value chain
- precondition: input VAT at each level
- problem: exclusion from input VAT deduction if goods/ services are tax free -> cumulative effect
2
Q
What is the principle of identity? Which types exist?
1.
2.
A
- states that the undertaking (§2 I UstG) includes all commercial and professional activties of the entrepreneur no matter what type of income is generated
- an entrepreneur can only have one undertaking at a time (principle of entrepreneur identity and enterprise identity)
3
Q
What does this mean: Taxable transaction requires execution of the service in the domestic territory
A
- ## refers to the determination of place and time of the service provision
