VALUE - ADDED TAX (VAT) AFF ECTION TO THE LITHUANIAN ECONOMIC COMPETITIVENESS. IT'S APP LICATION IN THE FOOD SECTOR

Abstract

VAT is an indirect tax paid by the subscriber in accordance with the purchase - the sales net. In the European Union the VAT system is strictly regulated, because this tax has a significant influence over the development of the EU's single market and production by ensuring adequate competitiveness. The main document regulating the sale of production, including agricultural and food products, the VAT regime across the EU is 2006, dated 28 November the European Council Directive 2006/112/EB on the common value added tax system. This Directive regulates practically all aspects of the application of VAT. In addition to this threshold, there are still some of the European Council and European Commission directives on the specific application of VAT to the hearings. Lithuania VAT introduced in 1994, at 1 day, entry into force of the Republic of Lithuania Law on value added tax Nr. I - 3455 which operated until 2002 30 June. Since 2002, entered into force on 1 July the new version of the VAT Act. Latest version of the Law 2008 of December 18 and 23 days of the year 2009, June 26 at substantially changed the standard VAT rate and abolished the former VAT exemptions.EU single market, with free movement of goods, the flat agricultural commodity prices, the growing influence of neighbouring countries have a comparative advantage. Realizable at the same price, indirectly, the Polish producers processors a competitive advantage on reduced VAT rates as compared to Lithuania the producers, processors. In addition, the zloty exchange rate fall in a competitive advantage over Lithuanian food products has increased (example: the price 100Lt/kg, Lithuanian producer - processor, realized the product remains 69Lt/kg, while Poland - 100Lt/kg, it is more 45proc). The 5 or 9 per cent rate of VAT is practically the price difference becomes a zloty exchange rate fluctuation. Value added tax increase had a negative impact on Lithuanian and vegetable sector. Trading company, with its significant market power, the VAT increase on to the shoulders ...