Should we exempt the services of insurance companies from VAT? Addressing this issue, the paper distinguishes between insurance against a general loss of resources and a loss of a specific commodity (property insurance). There is a case for exempting the former kind of insurance, but not the...

Who benefits from the evasion of value added taxes (VAT)? Using a reform that enforced VAT on previously non-compliant large retailers in Armenia, we estimate a one-third passthrough of the tax burden on prices. This suggests that pre-enforcement evasion rents were broadly shared with consumers...

An important question is whether VAT exemption of financial services is a desirable property or whether it is justified only due to practical and administrative necessity. This paper singles out a number of financial services for discussion of this issue in a context allowing for other taxes and...

The planned movement to the origin principle with the cross-border pre-tax system on a full-scale would lead, ceteris paribus, to changes in VAT revenues in the individual EU countries. For instance, the member countries with trade surpluses and higher VAT rates would be significantly better...

The paper surveys the characteristics of the common European VAT system, proposed by the EU-Commission to overcome the weaknesses of the transitional European VAT system, which was enacted in 1993 and is still in force. We argue that a harmonized VAT rate will generate substantial costs for EU...

We develop a simple structural model of value added tax (VAT) compliance, and estimate it using widely available national accounts data to learn about compliance in countries where little is currently known. International border controls improve VAT compliance, generating a correlation between...

The world runs a trade surplus with itself: the reported values of exports exceed the reported values of imports. This is a logically impossible but well-known empirical fact. Less wellknown is the fact that, in recent years, more than 80 percent of the global surplus is a trade surplus that the...

We study the pass-through of indirect taxes on beer prices in the European Union (EU). Exploiting the variation of value added tax rates, beer excise tax rates, and beer prices in a panel of monthly data from 1996 to 2016 of all current 28 EU member states, we estimate the tax pass-through of...

The use of digital services is largely non-rival. This paper argues that vanishing marginal costs of supply change policy incentives. Small countries are incentivized to tax the import of digital services. In fact, various countries have already moved towards expanded source taxation of online...

The size of tax evasion and fraud appears to be increasing steadily in the EU. To a certain extent, the completion of Single Market has further encouraged firms and households evasive behaviour in paying value added taxes in the EU Member States, whereas such efforts have traditionally been most...