ABOUT THE PRINCIPLE OF NEUTRALITY OF TAXATION IN NATIONAL AND INTERNATIONAL LAW

The article reveals the essence of the tax neutrality principle, in particular the influence of the abovementioned principle on the taxpayer's competitiveness and the economic entities' decision making process, its interconnection with the nondiscrimination principle, particular methods how it is being achieved and the correspondence between specific taxes and the tax neutrality principle, etc. The author analyzes the issue of tax privileges and preferences establishment, international institutions' recommendations regarding the qualification of a specific deviation from the standard terms of taxation as a tax privilege, and the mentioned tax benefits' influence on the tax burden in the corresponding economy sector. Also, the consequences of the principle of neutrality of taxation violation, ie the establishment of economically unjustified tax privileges and preferences for a specific group of taxpayers, are being considered. The author describes in detail the issue of tax neutrality in the European Union legislation and the Court of Justice jurisprudence. Particularly, cases related to the tax neutrality principle violation mainly arise in the context of import and export operations within the European Union. Inter alia, a country provides tax benefits to taxpayers (basically national) that produce goods which are characterized by some specific constituent elements or a production method that is specific to that country or a particular group of taxpayers. In such cases, the Court of Justice declares the violation of the tax neutrality and nondiscrimination principles due to presence of the indirect discrimination signs.