Manipulations and Frauds in the Value Added Tax (VAT) System

Abstract

The application of tax legislation faces two opposite attitudes: on one side, there are the taxpayers trying to pay as little taxes as possible and earn as much as possible income, on the other side there is the government trying to meet the fiscal aims of taxation. The assumption about the fairness of tax laws results in attitude in everyday life that the rich population, due to vagueness of tax laws, consciously seek “loopholes”, “tax shelter” and “tax arbitrage”. An important factor of non-payment of taxes is tax morale.
Despite numerous legislative amendments the amounts of VAT evasion are still very high. It is evident that more effective fight against VAT crime still has to be the primary objective of investigative activities within the tax investigation services.