The EU VAT system is founded on two basic principles, namely the principle of VAT as a general consumption tax, and the principle of fiscal neutrality. Based on key elements of the VAT system as it was introduced in the 1960s, they have been both developed by the Court as fundamental principles...

Within Europe differentiated rates structures date back to the introduction of VAT itself. Evidence as regards the negative consequences of applying multiple rates has been apparent for some decades. Since the late 1980s, therefore, there have been several attempts to amend European rates...

The EU VAT system, like many VAT systems around the world, exempts insurance and financial services. As opposed to merit goods or services, such as health or education, the rationale for exempting these services is not to diminish the regressivity of VAT, or to encourage their consumption, but...

This short paper discusses the introduction of a general reverse-charge mechanism in the EU VAT system to address missing trader fraud. It argues that this move presents significant disadvantages, the most important of which is that it effectively transforms the VAT into a de facto Retail Sales...

This short paper reviews the EU proposals for a definite VAT system, concluding that, together with the newly approved digital package, they represent therefore real progress the previous VAT system. Yet, they are not enough. A fair, efficient and fraud-proof EU VAT system requires, in addition...

The aim of this paper is to establish whether VAT place of supply rules are more effective allocation rules than international tax rules currently governing income taxation. This is done through the analysis of the “place where the activity is effectively carried out” (PWAECO) and the...

From the outset, turnover taxes have played a fundamental role in the European integration process. Harmonisation of these taxes was perceived an integral part of achieving a common market, and for this reason it was given priority. Over forty years since the introduction of a common VAT system,...

The proliferation of exempt supplies in VAT systems, particularly the traditional European VAT, undermines the integrity of the tax in many respects. Exempt supplies bear a tax burden equal to the input tax imposed along the supply chain up to the exempt supply. This leads to overtaxation of...