{"title":"Updates from Singapore","authors":"T. Tan","doi":"10.5235/WJOVL.1.2.196","DOIUrl":"https://doi.org/10.5235/WJOVL.1.2.196","url":null,"abstract":"","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123455665","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The influence of international accounting standards (IAS), now known as IFRS (International Financial Reporting Standards), on the question whether certain operations fall within the scope of VAT may be surprising at first sight. Indeed, they are supposedly two distinct disciplines, two autonomous sets of rules with diverging scopes: IFRS apply primarily to consolidated accounts of publicly traded companies, while VAT applies to taxable persons undertaking economic activities. Until recently, this assumption seemed uncontroversial as far as the tax and accounting community was concerned—to such a degree that the question of a possible influence of IFRS on VAT did not even occur. Nevertheless, a recent decision of the European Court of Justice (ECJ) dated 16 February 2012 stirred up trouble between these two sets of rules. In this ruling the ECJ developed an argument, based on IAS 17, concerning leasing agreements, to render an operation which would usually be analysed as a supply of services, as a supply of goods under the VAT Directive. Is it possible that this is a stand-alone case, which we could call a ‘glitch’ or a ‘case-law mishap’? Or is it the beginning of a new trend, where VAT practitioners will systematically search IFRS to find a practical solution to a harmonised interpretation of VAT at the European level, based on an economic approach as opposed to a more legal approach, as it currently stands? The aims of this article are to analyse the aforementioned ruling, to assess the consequences of a generalised application of the IFRS rules in VAT law, and, finally, to show the intrinsic limits of such an approach. To better understand the importance of this ruling and its potential application to IFRS, this article also provides a reminder of the VAT harmonisation process and its difficulties, and outlines the importance of the connection between the VAT declaration process and the accounting principles of LuxGAAP.
{"title":"The influence of international accounting standards in the field of VAT: a recent ECJ judgment and its impact on VAT practice","authors":"Michel Lambion","doi":"10.5235/WJOVL.1.2.158","DOIUrl":"https://doi.org/10.5235/WJOVL.1.2.158","url":null,"abstract":"The influence of international accounting standards (IAS), now known as IFRS (International Financial Reporting Standards), on the question whether certain operations fall within the scope of VAT may be surprising at first sight. Indeed, they are supposedly two distinct disciplines, two autonomous sets of rules with diverging scopes: IFRS apply primarily to consolidated accounts of publicly traded companies, while VAT applies to taxable persons undertaking economic activities. Until recently, this assumption seemed uncontroversial as far as the tax and accounting community was concerned—to such a degree that the question of a possible influence of IFRS on VAT did not even occur. Nevertheless, a recent decision of the European Court of Justice (ECJ) dated 16 February 2012 stirred up trouble between these two sets of rules. In this ruling the ECJ developed an argument, based on IAS 17, concerning leasing agreements, to render an operation which would usually be analysed as a supply of services, as a supply of goods under the VAT Directive. Is it possible that this is a stand-alone case, which we could call a ‘glitch’ or a ‘case-law mishap’? Or is it the beginning of a new trend, where VAT practitioners will systematically search IFRS to find a practical solution to a harmonised interpretation of VAT at the European level, based on an economic approach as opposed to a more legal approach, as it currently stands? The aims of this article are to analyse the aforementioned ruling, to assess the consequences of a generalised application of the IFRS rules in VAT law, and, finally, to show the intrinsic limits of such an approach. To better understand the importance of this ruling and its potential application to IFRS, this article also provides a reminder of the VAT harmonisation process and its difficulties, and outlines the importance of the connection between the VAT declaration process and the accounting principles of LuxGAAP.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128229740","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A general transfer pricing adjustment clause has been in force in the Portuguese VAT legislation since 1 January 2012. The clause is based on Article 80 of the VAT Directive. Prior to the introduction of this clause, there was a specific objective valuation rule valid for real estate operations, based on Article 1 of the ‘Rationalization Directive’. Unlike this specific clause, which is still in force, the new clause is a general transfer price adjustment clause, applicable to any transactions between related parties. A possible English translation of the clause might be:
{"title":"General transfer pricing adjustment clause introduced to the VAT regime in 2012","authors":"Nina Aguiar","doi":"10.5235/WJOVL.1.2.193","DOIUrl":"https://doi.org/10.5235/WJOVL.1.2.193","url":null,"abstract":"A general transfer pricing adjustment clause has been in force in the Portuguese VAT legislation since 1 January 2012. The clause is based on Article 80 of the VAT Directive. Prior to the introduction of this clause, there was a specific objective valuation rule valid for real estate operations, based on Article 1 of the ‘Rationalization Directive’. Unlike this specific clause, which is still in force, the new clause is a general transfer price adjustment clause, applicable to any transactions between related parties. A possible English translation of the clause might be:","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"402 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122787886","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Canada's GST qualifies as one of the most important fiscal innovations in the country's history. Due to its expansion to the subnational sphere through harmonisation, its scope has grown over time. This has amplified the non-neutralities, inequities, and compliance and administrative costs that have existed since its inception in 1991. This article briefly reviews the GST against best design practices and carefully examines the numerous exclusions from the base (tax preferences) present in the system. The central analysis focuses on the tax expenditures associated with those preferences and assesses whether the GST is the best instrument to achieve their objectives. The article concludes that the GST is not the best instrument and it identifies alternatives where feasible. It proposes the elimination of some of the GST reliefs (non-export zero rating, exemptions, and rebates) in the short term, and calls for a comprehensive review of the GST regime that pertains to public sector bodies, non-profit and charitable organisations, and the financial sector.
{"title":"Canada's GST at 21: a tax expenditure view of reform","authors":"Pierre-Pascal Gendron","doi":"10.5235/WJOVL.1.2.125","DOIUrl":"https://doi.org/10.5235/WJOVL.1.2.125","url":null,"abstract":"Canada's GST qualifies as one of the most important fiscal innovations in the country's history. Due to its expansion to the subnational sphere through harmonisation, its scope has grown over time. This has amplified the non-neutralities, inequities, and compliance and administrative costs that have existed since its inception in 1991. This article briefly reviews the GST against best design practices and carefully examines the numerous exclusions from the base (tax preferences) present in the system. The central analysis focuses on the tax expenditures associated with those preferences and assesses whether the GST is the best instrument to achieve their objectives. The article concludes that the GST is not the best instrument and it identifies alternatives where feasible. It proposes the elimination of some of the GST reliefs (non-export zero rating, exemptions, and rebates) in the short term, and calls for a comprehensive review of the GST regime that pertains to public sector bodies, non-profit and charitable organisations, and the financial sector.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133659396","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The rule on the importation of small value consignments will be amended in Finland from 2013","authors":"M. Hokkanen","doi":"10.5235/WJOVL.1.2.191","DOIUrl":"https://doi.org/10.5235/WJOVL.1.2.191","url":null,"abstract":"","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133691677","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Senate Resolution 13 and the control of ICMS (VAT) tax incentives on imports granted by Brazilian states","authors":"M. A. V. Catão","doi":"10.5235/WJOVL.1.1.81","DOIUrl":"https://doi.org/10.5235/WJOVL.1.1.81","url":null,"abstract":"","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121877379","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Federal Court of Australia has ruled that the Australian GST legislation was ‘drafted in a way which in many respects differs from comparable legislation in other jurisdictions'. Some of the differences are illustrated in the Australian decision of Travelex Ltd v Commissioner of Taxation, which is a useful case study of the Australian legislature's approach to the fundamental concepts in a value-added tax of (a) exemption of financial supplies, (b) exported services and (c) the conditions for input tax relief. While the Australian choice of drafting seems to have been deliberate, one is left with the question ‘is that what the legislature meant?’ The Australian experience contains lessons for jurisdictions that might consider adopting a value-added tax or changing existing provisions dealing with cross border transactions, financial services or input tax relief—other countries' VAT law does not always mean what it says and say what it means. It also illustrates that, in seeking to improve legislation by being different and modern in language, you might end up being different in substance. Staying with the old, cumbersome language can give more clarity of meaning—strange but true!
{"title":"Horton's lesson: Australia's struggle with ‘truth in drafting’","authors":"Michael B. Evans","doi":"10.5235/WJOVL.1.1.21","DOIUrl":"https://doi.org/10.5235/WJOVL.1.1.21","url":null,"abstract":"The Federal Court of Australia has ruled that the Australian GST legislation was ‘drafted in a way which in many respects differs from comparable legislation in other jurisdictions'. Some of the differences are illustrated in the Australian decision of Travelex Ltd v Commissioner of Taxation, which is a useful case study of the Australian legislature's approach to the fundamental concepts in a value-added tax of (a) exemption of financial supplies, (b) exported services and (c) the conditions for input tax relief. While the Australian choice of drafting seems to have been deliberate, one is left with the question ‘is that what the legislature meant?’ The Australian experience contains lessons for jurisdictions that might consider adopting a value-added tax or changing existing provisions dealing with cross border transactions, financial services or input tax relief—other countries' VAT law does not always mean what it says and say what it means. It also illustrates that, in seeking to improve legislation by being different and modern in language, you might end up being different in substance. Staying with the old, cumbersome language can give more clarity of meaning—strange but true!","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124414221","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On 1 March 2012 the Court of Justice delivered a judgment in Case C-280/10 Polski Trawertyn.1 The Court was asked questions relating to the right to deduct input VAT by a partnership, where it had been incurred in relation to the purchase of immovable property effected by the persons who subsequently founded the partnership. The Court held that under the provisions of the VAT Directive2 the partnership was entitled to recover the tax and this right was not affected by the fact that the invoice was issued in the names of the partners rather than the name of the partnership. The judgment fits into the consistent line of jurisprudence of the Court of Justice, which highlights the importance of the principle of neutrality of the European VAT system for taxable persons according to which the trader shall be entirely relieved of the burden of VAT payable or paid in the course of all his economic activities. It is not the first ruling in which the Court of Justice has adopted a non-formalistic approach giving priority to the fundamental principles underlying and constituting an integral part of the VAT system before the formal obligations established by legislation of national laws of Member States.3 Nevertheless, the ruling in Polski Trawertyn must not be listed, without any further commentary, together with other cases whose subject matter centres on the deductibility of input VAT related to acts preparatory to the carrying on of an economic activity. Due to the specific circumstances of the case that differ from the scenarios involved in cases heard by the Court of Justice previously, the judgment goes further than earlier rulings. Not only did the Court, for the first time, interpret the VAT
2012年3月1日，法院对案件C-280/10 Polski trawerty1作出判决。1法院被问及合伙企业抵扣进项增值税的权利，该抵扣是由于合伙企业的创始人购买不动产而产生的。法院认为，根据增值税指令的规定，合伙企业有权追回税款，而这一权利不受发票是以合伙人的名义而不是以合伙企业的名义开具这一事实的影响。该判决符合法院一贯的法理路线，突出了欧洲增值税制度对应税人员的中立原则的重要性，根据该原则，贸易商在其所有经济活动过程中应完全免除增值税应付或支付的负担。这并不是法院第一次在裁决中采取一种非形式主义的做法，将构成增值税制度的基本原则置于会员国国内法所规定的正式义务之前。3然而，在不作任何进一步评论的情况下，不应列出Polski Trawertyn案的裁决。以及其他案件，其主题集中于与进行经济活动的准备行为有关的进项增值税的扣除。由于该案件的具体情况不同于法院以往审理的案件所涉及的情况，因此此次判决比以往的判决走得更远。法院不仅第一次解释了增值税
{"title":"The right of a partnership to deduct input VAT paid in respect of preparatory activities conducted by future partners: a commentary on Case C-280/10 Polski Trawertyn","authors":"Marta Papis","doi":"10.5235/WJOVL.1.1.99","DOIUrl":"https://doi.org/10.5235/WJOVL.1.1.99","url":null,"abstract":"On 1 March 2012 the Court of Justice delivered a judgment in Case C-280/10 Polski Trawertyn.1 The Court was asked questions relating to the right to deduct input VAT by a partnership, where it had been incurred in relation to the purchase of immovable property effected by the persons who subsequently founded the partnership. The Court held that under the provisions of the VAT Directive2 the partnership was entitled to recover the tax and this right was not affected by the fact that the invoice was issued in the names of the partners rather than the name of the partnership. The judgment fits into the consistent line of jurisprudence of the Court of Justice, which highlights the importance of the principle of neutrality of the European VAT system for taxable persons according to which the trader shall be entirely relieved of the burden of VAT payable or paid in the course of all his economic activities. It is not the first ruling in which the Court of Justice has adopted a non-formalistic approach giving priority to the fundamental principles underlying and constituting an integral part of the VAT system before the formal obligations established by legislation of national laws of Member States.3 Nevertheless, the ruling in Polski Trawertyn must not be listed, without any further commentary, together with other cases whose subject matter centres on the deductibility of input VAT related to acts preparatory to the carrying on of an economic activity. Due to the specific circumstances of the case that differ from the scenarios involved in cases heard by the Court of Justice previously, the judgment goes further than earlier rulings. Not only did the Court, for the first time, interpret the VAT","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127724991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Originally, this exemption was mainly justified by the fact that the goods were taxed in the country of final destination (Article 20 VAT Directive; Article 283(2)(a) GTC). Intra-Community transactions are characterised by a transportation of goods between at least two Member States. Fraudsters are regularly tempted to take advantage of the administrative difficulties inherent in cross-border flows in order to avoid payment of VAT and/or deduct VAT that was not actually paid. Intra-Community supply exemptions have given rise to socalled ‘carousel fraud’. In France, Article 262(b)(I)(1), second indent, of the GTC provides for measures to prevent such fraud. Relying on ECJ case law,2 this article provides that ‘the exemption shall not apply where it is established that the provider knew or could not be unaware that the alleged recipient of the dispatch or transport had no actual economic activity’. Furthermore, Article 283(4)(a) of the GTC provides for joint liability between the seller and the buyer who knew or could not be unaware that all or part of the VAT owed would not be paid over to the State. The implementation of these measures destined to tackle VAT fraud on intra-Community supplies implies a capacity to establish such fraud in the first place. For clarity’s sake, we shall distinguish between evidence in favour of the taxpayer and evidence against him.
{"title":"Establishing VAT fraud in the case of cross-border supply","authors":"Yolande Sérandour","doi":"10.5235/WJOVL.1.1.95","DOIUrl":"https://doi.org/10.5235/WJOVL.1.1.95","url":null,"abstract":"Originally, this exemption was mainly justified by the fact that the goods were taxed in the country of final destination (Article 20 VAT Directive; Article 283(2)(a) GTC). Intra-Community transactions are characterised by a transportation of goods between at least two Member States. Fraudsters are regularly tempted to take advantage of the administrative difficulties inherent in cross-border flows in order to avoid payment of VAT and/or deduct VAT that was not actually paid. Intra-Community supply exemptions have given rise to socalled ‘carousel fraud’. In France, Article 262(b)(I)(1), second indent, of the GTC provides for measures to prevent such fraud. Relying on ECJ case law,2 this article provides that ‘the exemption shall not apply where it is established that the provider knew or could not be unaware that the alleged recipient of the dispatch or transport had no actual economic activity’. Furthermore, Article 283(4)(a) of the GTC provides for joint liability between the seller and the buyer who knew or could not be unaware that all or part of the VAT owed would not be paid over to the State. The implementation of these measures destined to tackle VAT fraud on intra-Community supplies implies a capacity to establish such fraud in the first place. For clarity’s sake, we shall distinguish between evidence in favour of the taxpayer and evidence against him.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129042705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Under the Polish Corporate Income Tax Act (hereinafter ‘CIT Act’ or ‘CITA’), transfer pricing restrictions are not applicable to transactions within a tax capital group. The question is whether the establishment of a CIT group eliminates the possibility of objective valuation for VAT purposes. According to the judgments below, objective valuation for VAT is not applicable within a CIT group. The judgments create new VAT tax planning opportunities for related companies with different right to deduct input VAT.
{"title":"The impact of CIT grouping on transfer pricing issues in VAT","authors":"Małgorzata Se̜k","doi":"10.5235/WJOVL.1.1.115","DOIUrl":"https://doi.org/10.5235/WJOVL.1.1.115","url":null,"abstract":"Under the Polish Corporate Income Tax Act (hereinafter ‘CIT Act’ or ‘CITA’), transfer pricing restrictions are not applicable to transactions within a tax capital group. The question is whether the establishment of a CIT group eliminates the possibility of objective valuation for VAT purposes. According to the judgments below, objective valuation for VAT is not applicable within a CIT group. The judgments create new VAT tax planning opportunities for related companies with different right to deduct input VAT.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132383905","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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