VAT in the EU ( )

Transcription

1 VAT in the EU ( ) Miroslava Cedidlová Tomas Bata University in Zlin, nám. T. G. Masaryka 5555, 76 Zlín, Czech Republic, Tel: , Fax: , cedidlova@rektorat.utb.cz Hana Ředinová Tomas Bata University in Zlin, Faculty of Management and Economics, Mostní 539, 76 Zlín, Czech Republic, Tel: , Fax: , redinova@fame.utb.cz Abstract There are many countries in the EU with a long tradition and in each of them is used a different tax system. It is impossible to make immediately a reform for all of taxes. Harmonisation of taxes is difficult, because taxes are incomes into the state budget. This article is focused on VAT during the ten last years. Key words Tax, tax harmonisation, indirect taxes, tax system, VAT Introduction and Research Objectives Taxes are always popular issues which are discussed. It is impossible to harmonise all of the taxes. I have focused on 27 countries in the EU and the high of VAT during the ten last years. Used methods and research results This article were used these statistical methods as domain, range, arithmetic mean, variance, standard deviation, coefficient of variation and comparation. VAT (Value Added Tax) VAT is a sales tax, levied on the expenditure of consumer goods and services and business transactions, which is paid by the consumer at the point of purchase. It is an obligatory tax in the EU. The tax rate of the VAT is in the EU harmonised. [6] There is a need to change the structure of taxation systems in Europe and there is the pressure on fiscal revenues facing the ageing of the population and excessive deficits. The number of the European Union Member States has grown, the differences in tax policies in the Union have became more significant. The fifth enlargement of the EU has strengthened tax rates competition. Highly divergent direct tax rates across Europe have raised questions about the limits of national sovereignty over direct taxes and the need to harmonize corporate taxes. As a result of the transposition of the community acquise into the national legislation of each new Member State, and given that the Treaty establishing the European Community does not directly specify provisions on direct taxes, the immediate impact of the enlargement has been first felt in the area of indirect taxes. [2]

2 2 VAT in the EU On January 7, the Sixth Directive was replaced by the VAT Directive (Directive nº 6/2/EC). It brings together the various provisions into one piece of legislation, so gives a clearer overview of EU VAT legislation currently in force. The VAT Directive guarantees that the VAT contributed by each of the Member States to the Community's own resources can be calculated. It still however, allows Member States many possible exceptions and derogations from the standard VAT coverage. Moreover, it does not set out the rates of VAT to be applied in Member States, only a minimum rate of 5% fixed until 3 December. This means that VAT rates differ widely. Currently, Member States apply a standard rate of between 5% and 25%. They may also apply or 2 reduced rates of at least 5%. There are a number of temporary derogations, e.g. zero rates in the United Kingdom and Ireland. The VAT coverage also still differs from one Member State to another. [3] 3 The evolution of VAT rates in the EU (-) In order to find out the difference between taxes in VAT in EU countries, there is a survey of regular VAT in EU countries. I have focused on the trends in the evolution of VAT from to. I have tried to research 27 countries. During the years there were countries whose have kept the same level of VAT e. g. Austria (2%), Denmark (25%), Luxemburg (25%), Sweden (25%) and Poland (22%). The lowest tax rate (8%) had Cyprus, however during the years the tax rate had been nearly doubled to 5%. The highest tax rate (25%) kept Sweden, Hungary and Denmark. During the years time period was a tendency to increase VAT. In Cyprus there was the VAT increased from % in to 5% in 3. In four countries the VAT decreased during the years period - in France, Hungary, Slovakia and the United Kingdom. In France, there was a tax decreased about % since from 2,6% since 995. In Hungary there was the VAT 25% from 995, from 6 to 8 was on the same level, 2% but in 9 came back to the same level as before. In Slovakia, there was tax rate about 23%, since 3 was VAT decreased by 3% and one year later, since 4 even about % less to 9%. This tendency is kept until. In the United Kingdom, the VAT was reduced from 8 by 2,5% to 5%. Since came back to the same level of the VAT it means 7,5%. From the Visegrad countries, the Czech Republic kept the lowest VAT (2%) in. The VAT rate in Hungary was the highest (25%). In three years, in 3 Slovakia decreased the VAT to 2% and later by %. In Poland the tax rate remained the same and in Hungary decreased the tax rate in 6 by 5%. In the Czech Republic remained the same tax rate. 2

3 The evolution of VAT rates in the EU (-) Country AT BE BG CY CZ DK ES FI FR 9,6 9,6 9,6 9,6 9,6 9,6 9,6 9,6 9,6 9,6 9,6 GE GR HU IR ,5 2,5 2 IT LV LT LU MT NL 7, PL PT RO SK SL SP SE UK 7,5 7,5 7,5 7,5 7,5 7,5 7,5 7, ,5 Table : The evolution of VAT rates in the EU (-), source [4], compiled by M. Cedidlová A total of 27 countries have different high of regular VAT in -. To describe changes in VAT during the years it is necessary to determine: ) size 2) domain 3) range, 4) arithmetic mean, 5) variance, 6) standard deviation, 7) coefficient of variation 3

4 ) Size There are 27 countries and we will observe in each of them their high of the VAT. The data is n = 27. 2) Domain The domain means the smallest number and the highest number in the file. [7] It means that the lowest taxes were in Cyprus during the years. The highest taxes were hold in Sweden, Denmark and Norway. In Hungary there was reduction from 25% to 2 % of for three years in 6-8. The domain of the VAT (-) Country CY SE, DK, NO Table 2: The domain of the VAT (-), source [4] compiled by M. Cedidlová 3) Range The range means the difference between the highest number in the file and the smallest number. The range was since the year 5%. Since 2 the range was lower to 2 %. In 3 was % and it is until. Range of the VAT (-) VAT Table 3: The domain of the VAT (-), source [4] compiled by M. Cedidlová 4) Calculating an Average of the VAT During the years time period the average of the VAT was increased nearly by %. It means that VAT is gradually increasing. x = n x i n i= The Average of the VAT (-) [7, p. 36] VAT 9,5 9,6 9,6 9,6 9,6 9,7 9,7 9,8 9,8 2, 2,4 Table 4: The Average of the VAT (-), source [4] compiled by M. Cedidlová 4

5 5) Variance (dispersion) m s 2 = n i= f j (x * j x ) 2 Variance of the VAT (-) [7, p. 37] Variance of the VAT,,8 8,96 7,7 7,4 7,4 5,92 5,49 6,7 7,8 6,43 Table 5: The Variance of the VAT (-), source [4] compiled by M. Cedidlová During the years period the highest variance was in which was %, in was lower,8%. The lowest variance occurred in 7, it was nearly half of the variance in, the variance was 5,49%. 6) Standard Deviation of the VAT s = s 2 [7, p. 38] Standard Deviation of the VAT (-) Standad deviation 3,32 3,29 2,99 2,78 2,65 2,65 2,43 2,34 2,46 2,66 2,54 Table 6: Standard Deviation of the VAT (-), source [4] compiled by M. Cedidlová Since the Standard deviation decreased to year 7 by,89%. Since 8 was decreasing to 9 and then again decreased to 2,54 %. 7) Coefficient of Variation of the VAT v = x s [7, p. 38] Coefficient of Variation of the VAT Coefficent of Variation,7,7,5,4,4,4,3,2,3,3,2 5

6 Table 7: Coefficient of Variation of the VAT (-), source [4] compiled by M. Cedidlová The Coefficient of Variation of the VAT was decreasing since by,53%. In and kept the same level,,7% and slowly went down in 2 by,% year to year. Conclusion This article was focused on VAT in the EU (-) in 27 countries. There is about % difference between tax rate in countries which have the highest tax rate and countries with the lowest tax rate. During the years period there was a tendency in the EU to increased VAT. In this article was counted with domain, range, arithmetic mean, variance, standard deviation and coefficient of variation. Acknowledgement This paper was carried out with the financial support from IGA TBU No. IGA/7/FaME//A. References [] Tax Consultant International [online] 9 [9-9-2] www: < [2] Tax harmonisation in the European Union [online] 9 [9-9-2] www: < > [3] European Comission, Taxation and Customs Union, [online] [--] www < [4] European Comission, Taxation and Customs Union, [online] [--] < works/rates/vat_rates_en.pdf> [5] Ezine Articles, [online] [--] www < Books: [6] Vančurová, A.. Daňové systémy ČR.Vox, Praha, 228 p., ISBN Textbook: [7] Karpíšek, Z., Drdla, M. 7. Applied Statistics, Brno University of Technology, Brno, 24 p. 6