Received: 2019-03-12  |  Accepted: 2019-07-30  |  Published: 2019-12-15

Title

Targets determination model for VAT risks mitigation at B2B marketplaces


Abstract

The objective of the study is to assess practical requirements for VAT implementation in relation to B2B e-commerce participants for the development and practical implementation of target determination model, considering the mitigation of tax risks associated with transactions on digital marketplaces, taking into account data disclosure upon corporate reporting submission. It was determined in the course of scientific and practical study of the specifics of implementation and payment of indirect taxes, that there is no general methodological approach to indirect taxation of international services accomplishment in the field of B2B e-commerce, due to the differences in the indirect taxes applied: VAT or retail tax. In this regard, the hypothesis is proposed that the provision of optimal tax conditions for electronic marketplaces to a considerable degree is fraught with the shift in business opportunities towards B2B transactions in tax jurisdictions, providing equal conditions for non-residents. In terms of international practice, the study is of significant interest as the experience of introduction of VAT implementation and payment in relation to B2B operations, VAT-exempt transactions, given that the tax and regulatory system of the jurisdiction under study is assessed as a system with increased business risks. The above calculations showed that B2B non-resident is in unequal conditions compared to the taxpayers of a particular jurisdiction, and the difference in the calculated VAT value is significant. However, the introduced obligation to pay VAT has not provoked the non-residents to move to the e-commerce marketplace of other tax jurisdictions. The risk zones identified during the study determined the essential need to build an optimal model on digital marketplaces, which, in our opinion, can be the basis for the development of the targets for mitigation of the tax risks associated with VAT payment on B2B marketplaces. In our opinion, the proposed model is universal for all business management systems and applied ERP systems, taking into account the provision of all parties in B2B transactions with access to information. According to the results of the study, it was determined that the disclosure of information on B2B operations, indirect taxes and tax risks in corporate reporting is not imputed by the regulators and has a largely inconsistent and unstructured nature. In this regard, any proactive disclosure in corporate public reporting on B2B is possible only if the company treats the information requests from external users as significant, taking into account the calculation of the cost of preparation of the information, which does not exceed the expected effects.


Keywords

digital economy, electronic commerce, indirect taxes, VAT, tax base, tax rates, tax optimization, tax jurisdictions


JEL classifications

H21 , F38 , G38


URI

http://jssidoi.org/jesi/article/431


DOI


Pages

1197-1216


Funding


This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Akhmadeev, Ravil
Plekhanov Russian University of Economics, Moscow, Russian Federation http://www.rea.ru
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Morozova, Tatiana
Plekhanov Russian University of Economics, Moscow, Russian Federation http://www.rea.ru
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Voronkova, Olga Yurievna
Altai State University, Barnaul, Russian Federation http://www.asu.ru
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Sitnov, Alexey A.
Financial University under the Government of the Russian Federation, Moscow, Russian Federation http://www.fa.ru
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Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

2


Issue date

December 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

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