The Legal Regulation of the Taxation of Electricity Supply in theEuropean Union
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Abstract
Electricity trade among the EU Member States increases because of electricity market liberalization and rapid development of new technologies. As a result, new trends in the development of social relations occur which have to be regulated taking into consideration their nature, the economical and political significance. This paper aims to study the necessity to regulate taxation of electricity supply by value added tax in terms of specific legal norms in the European Union. The processes of electricity market liberalization and specific physical characteristics of electrical energy cause this necessity. When Lithuania becomes a member of the European Union, the issue of electrical energy taxation will become relevant, as new possibilities for electrical energy trade with the other EU Member States will be opened.
The first part of the paper points out the correlation among the processes of electricity market liberalization, the tax policy and the creation of the EU’s single market. The importance of the creation of electricity market in order to strengthen the EU competitiveness is emphasized. The main stages in the process of electricity market liberalization are discussed. This part also deals with different aspects of the regulation and the significance of harmonization of value added tax among the EU Member States for the creation of the EU’s single market.
The second part of the paper is devoted for the analysis of tax features, which have to be implemented by the legal regulation. Such an analysis is necessary because the suitability of legal norms, which regulate the taxation of electricity supply, is estimated according to their ability to accomplish these indispensable features of taxation.
The analysis of the legal norms, which regulate some particular aspects of electricity supply taxation, is revealed in the third part of the paper. The specificity of electricity supply as a subject of value added tax and specific physical characteristics of electrical energy, which deal with its legal regulation in terms of electricity supply taxation, are discussed. The main focus is made on the analysis of legal norms, which define the place of electricity supply. A comparative analysis of legal regulation, where the criteria used to determine the place of goods and electrical energy supply are distinguished, is carried out and their practical application problems in electricity trade among the EU Member States are discussed.
The legal regulation of the reverse charge is discussed. This system enables to shift the burden of taxation from suppliers to customers. In this way a supplier is released from various procedures related to value added tax, which must be performed in the process of selling electrical energy to customers belonging to another Member State.
The legal regulation of electricity import taxation is also shortly reviewed in this article.
The first part of the paper points out the correlation among the processes of electricity market liberalization, the tax policy and the creation of the EU’s single market. The importance of the creation of electricity market in order to strengthen the EU competitiveness is emphasized. The main stages in the process of electricity market liberalization are discussed. This part also deals with different aspects of the regulation and the significance of harmonization of value added tax among the EU Member States for the creation of the EU’s single market.
The second part of the paper is devoted for the analysis of tax features, which have to be implemented by the legal regulation. Such an analysis is necessary because the suitability of legal norms, which regulate the taxation of electricity supply, is estimated according to their ability to accomplish these indispensable features of taxation.
The analysis of the legal norms, which regulate some particular aspects of electricity supply taxation, is revealed in the third part of the paper. The specificity of electricity supply as a subject of value added tax and specific physical characteristics of electrical energy, which deal with its legal regulation in terms of electricity supply taxation, are discussed. The main focus is made on the analysis of legal norms, which define the place of electricity supply. A comparative analysis of legal regulation, where the criteria used to determine the place of goods and electrical energy supply are distinguished, is carried out and their practical application problems in electricity trade among the EU Member States are discussed.
The legal regulation of the reverse charge is discussed. This system enables to shift the burden of taxation from suppliers to customers. In this way a supplier is released from various procedures related to value added tax, which must be performed in the process of selling electrical energy to customers belonging to another Member State.
The legal regulation of electricity import taxation is also shortly reviewed in this article.
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
