Model of Taxation of Small and Medium Enterprises (SMES) in Vat System Based on Cash Accounting Concept / Model oporezivanja malih preduzeća u sistemu PDV-a na bazi koncepta gotovinskog računovodstva

Abstract

Standard model of VAT includes a calculation of VAT liability on a basis of issued invoices. Since 1 January 2013, aiming at simplification of tax administering, reduction of tax compliance costs and improvement of liquidity of small and medium enterprises (SMEs), the European Union has applied a cash accounting concept for VAT purpose. Taking into account the initiatives on introduction of cash accounting in the VAT system in Bosnia and Herzegovina, as a measure for combating with the global economic and financial crisis, the goal of the article is to present benefits and drawbacks of the apllication of cash accounting concept in VAT system, based on analysis of the EU legal framework and experiences of the member states, indicating possible alternative solutions.