Supplementation of VAT Reverse Charge Mechanism With the Joint and Several Tax Liability Provision

EU Directive on the common system of value-added tax (2006/112) contains reverse charge provisions for specific categories of supplies of goods and services. The author points to a problem where if the reverse charge were to be applied only with respect to particular supplies, it could encourage taxpayers to evade VAT by using other items for other categories of supplies. This dynamic is likely to create pressure to extend the scope of the reverse charge mechanism, which would, in effect, and to some extent, convert the VAT into the retail sales tax. The main aim of the paper is to find a solution to avoid the above-mentioned potential problem. The starting hypothesis is that the European Union should stop broadening the scope of the reverse charge and should shift the focus to the joint and several tax liability provision as a preferred means of combatting VAT evasion, fraud and avoidance/abuse. In addition, he analyses the effects of the joint and several tax liability provision on value-added tax, considered a type of antievasion/abuse rule, from the perspective of legal certainty, double taxation and unequal treatment of the taxpayers. The author used the normative dogmatic, comparative and content analysis methods with particular reference to the case law of the Court of Justice of the European Union (CJEU)