Value-Added Taxes: Lessons Learned from Other Countries on Compliance Risks, Administrative Costs, Compliance Burden, and Transition
DIANE Publishing, Sep 1, 2008 - 61 pages
Dissatisfaction with the fed. tax system has led to a debate about U.S. tax reform, incl. proposals for a nat. consumption tax. One type of proposed consumption tax is a value-added tax (VAT). A VAT is levied on the difference between a bus. sales and its purchases of goods and services. Typically, a bus. calculates the tax due on its sales, subtracts a credit for taxes paid on its purchases, and remits the difference to the gov¿t. This report describes: (1) how VAT design choices, such as exemptions and enforcement mechanisms, have affected compliance, admin. costs, and compliance burden; (2) how countries with fed. systems administer a VAT; and (3) how countries that recently transitioned to a VAT implemented the new tax. Charts.
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Accounting Options activities administrative costs Appendix Australia Australia and Canada Australian Taxation Office Canada Revenue Agency carousel fraud claim input tax collect and remit collecting VAT complexity compliance burden conceptually simple VAT costs and compliance countries we studied economic European Union example exempt financial services federal VAT fraudulent refund furniture maker GAO analysis income tax input tax credits Insurance and reinsurance International Monetary Fund million Missing trader fraud OECD OECD Countries paid on inputs paid on purchases percent provincial VATs Québec real estate rebate reduced rate remit VAT retail reverse charge sales tax small businesses specific standard rate study countries subject to VAT Table tax base taxable threshold total VAT transactions United Kingdom value-added tax VAT administered VAT and provincial VAT collected VAT compliance VAT experts VAT implementation VAT paid VAT preferences VAT refunds VAT requirements VAT system VAT Treatment Zealand zero rating zero-rated