The European Commission is part way through overhauling how it taxes the consumption of goods and services. More needs to be done, writes Leigh Clark (Alvarez & Marsal Taxand UK).
EU VAT began life as an origin-based tax on services and a destination tax on goods. Services with a few exceptions were taxed according to where the supplier was located. This worked well enough at a time when most services were provided to people who consumed them in the same country as the supplier was based. International supplies of goods on the other hand were generally taxed in the country where they were to be consumed by virtue of the VAT charge at importation.
With technological advances in the late 1990s non-EU businesses found they had an advantage over their EU counterparts in not having to charge VAT on services they supplied to EU consumers. Distortion in the...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
Home >Articles > VAT: towards a destination principle
VAT: towards a destination principle
The European Commission is part way through overhauling how it taxes the consumption of goods and services. More needs to be done, writes Leigh Clark (Alvarez & Marsal Taxand UK).
EU VAT began life as an origin-based tax on services and a destination tax on goods. Services with a few exceptions were taxed according to where the supplier was located. This worked well enough at a time when most services were provided to people who consumed them in the same country as the supplier was based. International supplies of goods on the other hand were generally taxed in the country where they were to be consumed by virtue of the VAT charge at importation.
With technological advances in the late 1990s non-EU businesses found they had an advantage over their EU counterparts in not having to charge VAT on services they supplied to EU consumers. Distortion in the...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
