The Comparison of EU Reverse Charge Mechanism with Tax Witholding Procedure of Turkish Value Added Tax System

ÜNSAL H., Ubay B.

MALIYE DERGISI, sa.175, ss.275-298, 2018 (ESCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Basım Tarihi: 2018
  • Dergi Adı: MALIYE DERGISI
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.275-298
  • Anahtar Kelimeler: Reverse Charge, VAT, Tax Evasion
  • Ankara Hacı Bayram Veli Üniversitesi Adresli: Hayır

Özet

EU gives importance to Business to Business transactions within internal market. Functioning of internal market and ensuring free competition are linked with common Value Added Tax (VAT) system. According to EU VAT system, in respect to transactions between member states, VAT is charged by the destination country. It is because both sides of transactions are VAT taxpayers in their member states. But it lays the groundwork for VAT evasions by using missing trader fraud scheme. For fighting against VAT fraud, EU introduced reverse charge mechanism for cross border B2B transactions within internal market. The mechanism differs from the tax witholding system which is effective in Turkish VAT system in respect to its procedure.