Pub Date : 2015-07-03DOI: 10.1080/20488432.2015.1096631
Francesco Cannas
The BEPS project highlights the relevance of the challenges posed by the digital economy. The OECD notes that, because the digital economy is increasingly becoming the economy itself, it is not feasible to ringfence it from the rest of the economy for tax purposes. To a certain extent, this risk is inherent to the EU VAT system. In this article, the author uses virtual currencies as a ‘stress test’ for the actual EU VAT system, with the aim of pinpointing some of its weaknesses in respect of the digital economy. Having summarised the recent developments within EU and OECD context, the author proposes an analysis of what virtual currencies and mining activities ‘are’ under the current VAT, and how they could be treated. Finally, the author proposes and analyses a set of possible solutions. He goes from solutions based on the interpretation of current VAT legislation, which could be accepted by the CJEU in the pending case Hedqvist (C-264/14), to an innovative idea that would imply a radical change of the current system. This contribution tackles the current pattern of the categories ‘good’ and ‘service’.
{"title":"The last developments of the digital economy and bitcoins as a ‘stress test’ for the EU VAT system","authors":"Francesco Cannas","doi":"10.1080/20488432.2015.1096631","DOIUrl":"https://doi.org/10.1080/20488432.2015.1096631","url":null,"abstract":"The BEPS project highlights the relevance of the challenges posed by the digital economy. The OECD notes that, because the digital economy is increasingly becoming the economy itself, it is not feasible to ringfence it from the rest of the economy for tax purposes. To a certain extent, this risk is inherent to the EU VAT system. In this article, the author uses virtual currencies as a ‘stress test’ for the actual EU VAT system, with the aim of pinpointing some of its weaknesses in respect of the digital economy. Having summarised the recent developments within EU and OECD context, the author proposes an analysis of what virtual currencies and mining activities ‘are’ under the current VAT, and how they could be treated. Finally, the author proposes and analyses a set of possible solutions. He goes from solutions based on the interpretation of current VAT legislation, which could be accepted by the CJEU in the pending case Hedqvist (C-264/14), to an innovative idea that would imply a radical change of the current system. This contribution tackles the current pattern of the categories ‘good’ and ‘service’.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117079791","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}
Pub Date : 2015-07-03DOI: 10.1080/20488432.2015.1069083
Maria Teresa Sutich, Paolo Centore
The judgment of the European Court of Justice C-131/13 of 2014, Italmoda, besides confirming the principles already established on the consequences arising from the participation of the taxpayer to a tax fraud on VAT, introduces the principle of the extraterritoriality of the effects of tax fraud in the hands of the traders. The partial fulfillment of the obligations of information, limited to the jurisdiction of origin, as part of a fraudulent plan is no longer sufficient to ensure the rights of the taxpayer in the country of establishment. Cooperation between member states must be understood as not limited to the activities of national administrations because in the case of evasion, avoidance or abuse interaction among different judicial entities is justified through the possibility of reviewing transactions carried out simultaneously to recover unlevied taxation through conduct that can be considered unlawful or contrary to the purposes of the Directive.
{"title":"Denial of a right and extraterritoriality: strengthening the fight against tax fraud","authors":"Maria Teresa Sutich, Paolo Centore","doi":"10.1080/20488432.2015.1069083","DOIUrl":"https://doi.org/10.1080/20488432.2015.1069083","url":null,"abstract":"The judgment of the European Court of Justice C-131/13 of 2014, Italmoda, besides confirming the principles already established on the consequences arising from the participation of the taxpayer to a tax fraud on VAT, introduces the principle of the extraterritoriality of the effects of tax fraud in the hands of the traders. The partial fulfillment of the obligations of information, limited to the jurisdiction of origin, as part of a fraudulent plan is no longer sufficient to ensure the rights of the taxpayer in the country of establishment. Cooperation between member states must be understood as not limited to the activities of national administrations because in the case of evasion, avoidance or abuse interaction among different judicial entities is justified through the possibility of reviewing transactions carried out simultaneously to recover unlevied taxation through conduct that can be considered unlawful or contrary to the purposes of the Directive.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124633550","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}
Pub Date : 2015-07-03DOI: 10.1080/20488432.2015.1082237
Bilal Hassan
In this article, the author makes an assessment of the sales tax administration in Pakistan with respect to certain areas including registration, filing, payment, invoicing, refunding and auditing, and suggests policy recommendations for making sales tax system practically effective and efficient. The paper also examines the administrative disputes that have emerged due to the splitting of the sales tax base between the federal and provincial governments. Finally, empirical analysis is carried out to examine the revenue performance of the sales tax administration.
{"title":"Sales tax administrative functions in Pakistan: Reflections on the problems","authors":"Bilal Hassan","doi":"10.1080/20488432.2015.1082237","DOIUrl":"https://doi.org/10.1080/20488432.2015.1082237","url":null,"abstract":"In this article, the author makes an assessment of the sales tax administration in Pakistan with respect to certain areas including registration, filing, payment, invoicing, refunding and auditing, and suggests policy recommendations for making sales tax system practically effective and efficient. The paper also examines the administrative disputes that have emerged due to the splitting of the sales tax base between the federal and provincial governments. Finally, empirical analysis is carried out to examine the revenue performance of the sales tax administration.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128675119","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}
Pub Date : 2015-02-16DOI: 10.1080/20488432.2015.1120027
J. Englisch
In the last decades, VAT/GST systems have proliferated across the globe and have usually replaced any eventual cumulative turnover taxes or retail sales taxes (RST) previously operated in the respective country of adoption. However, the input VAT credit inherent to a VAT/GST facilitates some particular types of tax fraud which are absent in a turnover tax or RST system, especially because the entitlement of the business customer to the tax credit is normally not contingent upon the prior payment of the corresponding VAT/GST liability by the supplier. The ensuing ‘VAT gap’ has fueled the debate in the EU whether VAT should be transformed into a so-called ‘general reverse charge regime’ that would be equivalent to a RST while maintaining the invoice and audit trail of a VAT system . The reform project has gained momentum recently due to a proposal by the Commission which would allow the temporary application of a generalised reverse charge mechanism by Member States that so desire. This article discusses the pros and cons of such a hybrid system.
{"title":"‘Hybrid’ forms of taxing consumption: A viable alternative to EU VAT?","authors":"J. Englisch","doi":"10.1080/20488432.2015.1120027","DOIUrl":"https://doi.org/10.1080/20488432.2015.1120027","url":null,"abstract":"In the last decades, VAT/GST systems have proliferated across the globe and have usually replaced any eventual cumulative turnover taxes or retail sales taxes (RST) previously operated in the respective country of adoption. However, the input VAT credit inherent to a VAT/GST facilitates some particular types of tax fraud which are absent in a turnover tax or RST system, especially because the entitlement of the business customer to the tax credit is normally not contingent upon the prior payment of the corresponding VAT/GST liability by the supplier. The ensuing ‘VAT gap’ has fueled the debate in the EU whether VAT should be transformed into a so-called ‘general reverse charge regime’ that would be equivalent to a RST while maintaining the invoice and audit trail of a VAT system . The reform project has gained momentum recently due to a proposal by the Commission which would allow the temporary application of a generalised reverse charge mechanism by Member States that so desire. This article discusses the pros and cons of such a hybrid system.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"130 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131634446","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}
Pub Date : 2015-01-02DOI: 10.1080/20488432.2015.1050790
Sebastian Pfeiffer
EU VAT grouping as an optional provision for the Member States of the European Union gives rise to several questions regarding its interpretation. In the article, the author analyses the current question of the EU VAT grouping notion which either have been controversially discussed throughout academic literature or have been brought up after the recent CJEU case law. While VAT grouping may be a means to facilitate VAT neutrality, the current EU provisions lead to disparities particularly in cross-border situations. Without further harmonisation, the potential of VAT grouping cannot be fully utilised and may lead to the eventual abolishment of VAT grouping.
{"title":"Current questions of EU VAT grouping","authors":"Sebastian Pfeiffer","doi":"10.1080/20488432.2015.1050790","DOIUrl":"https://doi.org/10.1080/20488432.2015.1050790","url":null,"abstract":"EU VAT grouping as an optional provision for the Member States of the European Union gives rise to several questions regarding its interpretation. In the article, the author analyses the current question of the EU VAT grouping notion which either have been controversially discussed throughout academic literature or have been brought up after the recent CJEU case law. While VAT grouping may be a means to facilitate VAT neutrality, the current EU provisions lead to disparities particularly in cross-border situations. Without further harmonisation, the potential of VAT grouping cannot be fully utilised and may lead to the eventual abolishment of VAT grouping.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131312841","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}
Pub Date : 2015-01-02DOI: 10.1080/20488432.2015.1049092
Marie Lamensch
Should we apply the same VAT rates to digital and paperback publications for the sake of fiscal neutrality? The debate has been raging on for some time but the question has not yet been analysed in detail, nor in the literature, nor even by the Court of Justice of the European Union in its recent decisions concerning the application by France and Luxembourg of reduced rates for e-books. This is the objective of this paper, and also the occasion to suggest a new perspective on the scope and objective of the case-law based VAT ‘principle of fiscal neutrality’.
{"title":"Different VAT rates for digital and paperback publications in the EU, a breach of ‘fiscal neutrality’? A tentative answer and broader reflection on the coherence of the EU rules prohibiting indirect tax discrimination","authors":"Marie Lamensch","doi":"10.1080/20488432.2015.1049092","DOIUrl":"https://doi.org/10.1080/20488432.2015.1049092","url":null,"abstract":"Should we apply the same VAT rates to digital and paperback publications for the sake of fiscal neutrality? The debate has been raging on for some time but the question has not yet been analysed in detail, nor in the literature, nor even by the Court of Justice of the European Union in its recent decisions concerning the application by France and Luxembourg of reduced rates for e-books. This is the objective of this paper, and also the occasion to suggest a new perspective on the scope and objective of the case-law based VAT ‘principle of fiscal neutrality’.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"440 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131667733","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}
Pub Date : 2015-01-02DOI: 10.1080/20488432.2015.1078993
E. Whittle
This article provides a summary of the European Commission's report ‘Implementing the destination principle to intra-EU B2B supplies of goods’, produced by Ernst & Young in July 2015. The report was commissioned in order to analyse five alternative VAT taxation models for the B2B supply of goods in the EU that had been identified by the Commission as being potential solutions to two inherent problems associated with the current EU VAT system: high VAT compliance costs associated with cross-border trade for businesses, and VAT fraud levels. In this article, the key features of each of the five options are discussed, together with how they will be implemented in practice in both straight forward B2B cross-border transactions and also in relation to more complex B2B cross-border supply chains. This article provides an overview of the potential impact of each option on business VAT compliance costs, VAT fraud and the wider economy. In addition, it also considers member state tax authority administration costs, cash flow impact and reporting obligations. From the analysis carried out, it will be identified which option(s) result in the most beneficial impact from the perspective of VAT administration costs, fraud reduction, and economic impact. In addition, this article will provide some further detail as to the Commission's proposed next steps following publication of the study.
{"title":"A shift in the EU VAT system: The proposed implementation of the ‘destination principle’ to intra-EU B2B supplies of goods","authors":"E. Whittle","doi":"10.1080/20488432.2015.1078993","DOIUrl":"https://doi.org/10.1080/20488432.2015.1078993","url":null,"abstract":"This article provides a summary of the European Commission's report ‘Implementing the destination principle to intra-EU B2B supplies of goods’, produced by Ernst & Young in July 2015. The report was commissioned in order to analyse five alternative VAT taxation models for the B2B supply of goods in the EU that had been identified by the Commission as being potential solutions to two inherent problems associated with the current EU VAT system: high VAT compliance costs associated with cross-border trade for businesses, and VAT fraud levels. In this article, the key features of each of the five options are discussed, together with how they will be implemented in practice in both straight forward B2B cross-border transactions and also in relation to more complex B2B cross-border supply chains. This article provides an overview of the potential impact of each option on business VAT compliance costs, VAT fraud and the wider economy. In addition, it also considers member state tax authority administration costs, cash flow impact and reporting obligations. From the analysis carried out, it will be identified which option(s) result in the most beneficial impact from the perspective of VAT administration costs, fraud reduction, and economic impact. In addition, this article will provide some further detail as to the Commission's proposed next steps following publication of the study.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114645198","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}
Pub Date : 2015-01-02DOI: 10.1080/20488432.2015.1078994
J. Englisch
As envisaged in the Green Book on the Future of VAT, the EU Commission is preparing a fundamental reform of the EU VAT regime for B2B cross-border trade in goods. To this effect, it commissioned a study on five possible reform options that was recently published and discussed by stakeholders at a Fiscalis Seminar. This paper analyses the outcome of the study and the seminar as well as the Commission’s plans for the way forward, and offers some critical reflections on the respective options.
{"title":"Conclusions to be drawn—Possible next steps—Directions for future work","authors":"J. Englisch","doi":"10.1080/20488432.2015.1078994","DOIUrl":"https://doi.org/10.1080/20488432.2015.1078994","url":null,"abstract":"As envisaged in the Green Book on the Future of VAT, the EU Commission is preparing a fundamental reform of the EU VAT regime for B2B cross-border trade in goods. To this effect, it commissioned a study on five possible reform options that was recently published and discussed by stakeholders at a Fiscalis Seminar. This paper analyses the outcome of the study and the seminar as well as the Commission’s plans for the way forward, and offers some critical reflections on the respective options.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125310287","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}
Pub Date : 2014-12-31DOI: 10.5235/20488432.3.3.166
Rasa Mikutienė
The fixed establishment concept is highly important in supplies of services in European VAT as it determines the country of taxation and applicability of reverse charge. Irrespective of its relevance, the concept itself lacks clarity. Because of this, on the one hand, in many Member States it is vaguely applied in practice. On the other hand, the lack of clarity allows the concept to be misused in seeking various tax benefits. In the light of this, the purpose of this paper is twofold: first, to discuss the preferred treatment of the fixed establishment stemming from the interpretation of the current legislative provisions and practice of the Court of Justice of the European Union, and second, to briefly touch upon the measures for mitigation of the negative effects relating to misuse of the fixed establishment concept.
{"title":"The preferred treatment of the fixed establishment in European VAT","authors":"Rasa Mikutienė","doi":"10.5235/20488432.3.3.166","DOIUrl":"https://doi.org/10.5235/20488432.3.3.166","url":null,"abstract":"The fixed establishment concept is highly important in supplies of services in European VAT as it determines the country of taxation and applicability of reverse charge. Irrespective of its relevance, the concept itself lacks clarity. Because of this, on the one hand, in many Member States it is vaguely applied in practice. On the other hand, the lack of clarity allows the concept to be misused in seeking various tax benefits. In the light of this, the purpose of this paper is twofold: first, to discuss the preferred treatment of the fixed establishment stemming from the interpretation of the current legislative provisions and practice of the Court of Justice of the European Union, and second, to briefly touch upon the measures for mitigation of the negative effects relating to misuse of the fixed establishment concept.","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"203 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114273785","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}
Pub Date : 2014-12-31DOI: 10.5235/20488432.3.3.210
B. Terra
Under the EU VAT rules the place where a customer has established his business or has a fixed establishment is decisive in determining where services are (deemed to be) rendered. Defining the concept of the place where the undertaking has established its business does not, raise ‘problems’. It is clear that the term ‘should be understood in its technical sense [that is to say, as referring to] ... the registered office, as indicated by the statutes of the company owning the supplier undertaking’. The concept of a fixed establishment, however, is not the same in all Member States. It is remarkable that the VAT Directives do not provide for an accurate definition of a fixed establishment and (until recently) the only guidelines were therefore the judgments of the Court of Justice of the European Union (CJEU). The Welmory case is discussed below which should shed some light on internet activities to and from a fixed establishment in another (Member) State than where the business establishment is located. The case deals with a dispute concerning the VAT payable by Welmory sp Zoo (Welmory Poland) during the months January to April 2010. Welmory Poland had entered into a cooperation agreement with a Cypriot company, Welmory Ltd. According to the agreement the Cypriot company would run a website in Polish on which auctions could be held. On this website Welmory Poland would market and sell goods for its own account. It was however only possible to buy these products if the customers had acquired packets of ‘bids’ in advance, that is, the right to make an offer to purchase goods being auctioned at a
{"title":"Internet and the concept of ‘fixed establishment’ of the recipient of a supply of services: Case C-605/12 (Welmory)","authors":"B. Terra","doi":"10.5235/20488432.3.3.210","DOIUrl":"https://doi.org/10.5235/20488432.3.3.210","url":null,"abstract":"Under the EU VAT rules the place where a customer has established his business or has a fixed establishment is decisive in determining where services are (deemed to be) rendered. Defining the concept of the place where the undertaking has established its business does not, raise ‘problems’. It is clear that the term ‘should be understood in its technical sense [that is to say, as referring to] ... the registered office, as indicated by the statutes of the company owning the supplier undertaking’. The concept of a fixed establishment, however, is not the same in all Member States. It is remarkable that the VAT Directives do not provide for an accurate definition of a fixed establishment and (until recently) the only guidelines were therefore the judgments of the Court of Justice of the European Union (CJEU). The Welmory case is discussed below which should shed some light on internet activities to and from a fixed establishment in another (Member) State than where the business establishment is located. The case deals with a dispute concerning the VAT payable by Welmory sp Zoo (Welmory Poland) during the months January to April 2010. Welmory Poland had entered into a cooperation agreement with a Cypriot company, Welmory Ltd. According to the agreement the Cypriot company would run a website in Polish on which auctions could be held. On this website Welmory Poland would market and sell goods for its own account. It was however only possible to buy these products if the customers had acquired packets of ‘bids’ in advance, that is, the right to make an offer to purchase goods being auctioned at a","PeriodicalId":114680,"journal":{"name":"World Journal of VAT/GST Law","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128164278","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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