Impact of VAT regimes on organisation of producers’ operations under CAP financial instruments for the fruit and vegetable sector

Abstract

This work investigates the repercussions of VAT neutrality of the «operational funds». At this moment, this is one of the most important financial sources for the fruit and vegetables sector in the European Union, and specifically in Spain. The operational funds, financed fifty-fifty by the organizations partners and by the community budget, have been regulated by the Community Agricultural Policies and are, therefore, not covered in the Spanish mercantile and tax regulations. Through this analysis, we have concluded that "reserve" is the most appropriate alternative for account identification of the partners contribution to these funds. Also, we have built the models that allow for quantification of indirect taxes. These models, if the reserve option is chosen, lead to VAT neutrality for the organizations, thus avoiding extra charges for the partner.