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Fiscal Neutrality

   Also found in: Wikipedia 0.01 sec.
Fiscal Neutrality
A situation in which a government does not use tax incentives to encourage or discourage behavior. Fiscal neutrality especially refers to a balanced budget because it requires neither the government borrowing of a budget deficit nor the investment of a budget surplus.


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Barney Horn, indirect tax partner at Deloitte in Birmingham, said: "This is a landmark decision endorsing one of the most important principles of community law - fiscal neutrality.
The judges' decision supports last year's rulings by the VAT & Duties Tribunal that the inconsistent application of VAT to interval bingo and gaming machines by HM Revenue & Customs contravened the EU principle of fiscal neutrality.
In yesterday's ruling the court said this distinction, removed in 2005, infringed EC law and, particularly, the principles of equal treatment and fiscal neutrality.
 
 
 
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