Abstract:Within the Member States of the European Union, value added tax (VAT) is the most harmonized form of tax from all types of direct and indirect taxes. It does not affect the costs or the revenues of the company, but it affects taxpayers on the other hand. The impact on the company's cash flows is most significantly affected. The basic principle of VAT taxation consists of the following idea. The Member State of final consumption of the goods or services is the state to whom the VAT finally belongs to. The free movement of goods and services between the Member States resulted in many new traffic companies being created. The measure of VAT influence on Cash Flows depends mainly on two impact factors. The first is the length of excessive deduction payment period to taxpayer bank account. The second impact factor is the amount of excessive deduction expressed through money. The objective of this study is an evaluation and quantification of the impact of value added tax on the road traffic companies' cash flows. The financial burden of traffic companies had an upward trend only during the first and second year of the analyzed period. Since 2006, the financial burden had a downward trend. This decrease was more significant until 2009 (the end of the financial crisis in European countries). After this year, the declining rate had moderated. This development results not only from declining interest rates of the European Central Bank but also from economic growth and development in European countries.
JEL Classification
IntroductionThe objective of this study is an evaluation and quantification of the impact of value added tax on road traffic companies' cash flows. This research also focuses on the comparison of this impact on three different sets of traffic companies. The criteria for creation these three sets were three basic value added tax (VAT) schemes. The first scheme is supply of goods and services at Slovak territory. The second one is the acquisition of goods in the territory of the country from another member state. The third schema is the importation of goods. The time period of 2005-2015 is analyzed in this study. The impact of the value added tax is quantified by financial expense interests. These expenses depend on the period of time limits for the excess deduction and also on the excess deduction. The authors have chosen three basic indicators: indicator: "value of money I," indicator: "value of money II" and financial burden (base index). The analysis presented in this study confirms the time period between the day of VAT tax return submission to the Financial Directorate by electronic means (this is the day of taxpayer's entitlement to excessive deduction) and between the validity day (the day when the taxpayer receives payment to his bank account from the Financial directorate) as the cause of VAT financial burden. The study is organized as follows. First, the background of the VAT system in the Slovak Republic is presented, this is followed by the literature review, and finally by the theoret...
