The end of VAT exemptions: towards a post-modern VAT
The theoretical and practical advantages of the VAT have led to its adoption in some form or another by most countries and by many hundreds of subnational administrations worldwide. However, nowhere is VAT found without exemptions. Exemptions are arguably the most controversial feature of VAT regimes. They constitute exceptions to the principle of VAT as a tax on consumption, undermine its fundamental logic, and compromise its efficiency and neutrality. In traditional VAT systems, like those in place in European countries, exemptions constitute a sizable portion of the potential tax base. Historical factors that led to the adoption of multiple exemptions in the traditional European VAT model were not present in most jurisdictions outside the EU and adopters of a modern VAT model were able to avoid these features of the traditional VAT, for the most part substantially limiting the number of exemptions. However, whilst the modern VAT model undoubtedly constitutes an improvement on the traditional VAT model, there is a clear realisation that modern VATs are not a complete panacea. Existing exemptions under modern VATs can still impose significant economic and administrative costs. Against this background, this paper questions the current existence of VAT exemptions. Are VAT exemptions desirable and/or unavoidable, or are alternative legal designs possible and/or necessary? And if alternative designs are available and required, which of these represents the best solution to doing away with exemptions? Thirty years since the first appearance of modern VATs on the world stage, this paper argues that it is time to consider a progression in tax design and move towards a post-modern VAT.
Year of publication: |
2013
|
---|---|
Authors: | de la Feria, Rita |
Saved in:
Type of publication: | Article |
---|---|
Type of publication (narrower categories): | Congress Report |
Language: | English |
Notes: | de la Feria, Rita (2013) The end of VAT exemptions: towards a post-modern VAT. In: The Lisbon International and European Tax Law Seminars, 04/04/13, University of Lisbon, Portugal. |
Source: | BASE |
Persistent link: https://www.econbiz.de/10011426128
Saved in favorites
Similar items by person
-
de la Feria, Rita, (2010)
-
Ending VAT Exemptions: Towards A Post-Modern VAT
de la Feria, Rita, (2013)
-
Introducing the Principle of Prohibition of Abuse of Law
de la Feria, Rita, (2011)
- More ...