Discrimination of domestic supplies relative to imports for the value added tax exemptions
Discrimination of domestic supplies relative to imports for the value added tax exemptions

Summary/Abstract: The general idea of the value added tax is to be neutral in respect of the choice of suppliers according to their location. This is the reason why exports are taxed with the 0% tax rate and domestic supplies or imports are taxed with the same tax rates. To ensure neutrality of the tax the legislator applies the same exemptions from the value added tax to domestic supplies and imports. At first glimpse this solution seems to give the same results, but in fact it means that domestic supplies are discriminated in favour of imports. The main objective of the article is to prove that, when the recipient of goods is a consumer or a non-taxable entity, the exemption from the value added tax, which applies both to imports and domestic supplies of goods, causes discrimination to the latter. In the article a few examples of exemptions on imports from the Polish Value Added Tax Act are presented. They were chosen because of their possible influence on a choice of suppliers based on their location.

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