Arvonlisäverodirektiivi

The Arvonlisäverodirektiivi, or the Value Added Tax Directive, is a key piece of European Union legislation that governs the application of Value Added Tax (VAT) across member states. Its primary aim is to harmonize VAT systems within the EU to ensure fair competition and the smooth functioning of the internal market. The directive establishes common rules for the taxable transactions, taxable persons, place of supply, tax rates, and exemptions related to VAT. It defines what constitutes a taxable supply of goods and services, who is liable to pay VAT, and how VAT is collected.

A significant aspect of the directive is its role in facilitating cross-border trade within the EU. It sets out principles for the taxation of intra-Community supplies and acquisitions, aiming to prevent double taxation and tax evasion. The directive also provides a framework for member states to establish standard and reduced VAT rates, although the ultimate decision on specific rates remains largely with national governments, within certain EU-defined parameters. It also details various VAT exemptions, such as those for certain financial and insurance services, education, and healthcare. The directive is regularly amended to adapt to economic changes and to further align national VAT legislation with EU objectives.