Can Reform Models of Value Added Taxation Stop the VAT Evasion and Revenue Shortfalls in the EU?

Abstract

VAT evasion caused by the growth of carousel fraud has recently led to significant VAT revenue losses in the EU. Carousel fraud works such that intra-EU firms repeatedly carry out cross-border supply and purchase of goods and services, leading to the fraudulent retention of revenue. This study discusses three reform models of the VAT system in Germany, whose implementation would open up further possibilities for tax evasion and lead to a considerable increase in administrative costs.VAT evasion, reform models, carousel fraud, Germany, EU,

Is the Value Added Tax System Sustainable? The Case of the Czech and Slovak Republics

“…In this context, several substantial reforms to the VAT system were proposed, although their effectiveness is often questionable. One of the studies, made by Gebauer, Nam and Parsche [37] and focused on the potential impact of three different VAT systems in Germany, showed, for instance, that their implementation would by contrast give rise to other possibilities of tax avoidance and an increased administrative burden. The negative impact of administrative burden on small and medium-sized enterprises is also stressed in Mikušová [38].…”

Zmiany w podatku VAT w kontekście przeciwdziałania zjawisku unikania i uchylania się od opodatkowania w latach 2016–2018

“…Przedsi biorstwa skupiaj si na poszukiwaniu rodków prowadz cych do zmniejszenia obci e podatkowych, zamiast koncentrowa si na w asnej dziaalno ci, rozwoju tej dzia alno ci, zwi kszaniu poziomu konkurencyjno ci. Po stronie pa stwa rosn za koszty administracyjne wykrywania i zapobiegania nielegalnym praktykom podatkowym (Gebauer, Nam i Parsche, 2007). Organy podatkowe znajduj si pod rosn c presj zlokalizowania nadu y podatkowych, zebrania dodatkowych dochodów z podatków, przewidzenia nieprawid owych zachowa podatników.…”

A general framework for measuring VAT compliance rates

“…These measures have been used in many studies to investigate compliance and enforcement issues. They have been used as instruments for: (i) understanding the cross-country determinants of VAT compliance (Aizenman and Jinjarak, 2008;De Mello, 2009;Gebauer et al, 2007); (ii) comparing VAT compliance across countries (Jack 1996, Bird and Gendron 2007, OECD 2008; (iii) comparing country-specific VAT compliance over time (Jack,1996;Gebauer et al, 2007;Hybka, 2009); (iv) determining the optimum VAT rate (Matthews, 2003); and (v) evaluating the effect of VAT reform models on VAT evasion (Gebauer et al, 2007). 4 In using the VP and CE measures to investigate VAT characteristics and compliance, deviations from one in these measures are often interpreted as a measure of non-compliance due to tax evasion, tax fraud and administrative inefficiency or laxity 5 .…”

“…De Mello (2009) uses the CE index as a measure of tax compliance in a model of a tax avoidance game between taxpayers and the tax authority Matthews (2003). uses a ratio similar to the VP as a measure of compliance in his estimate of the revenue maximising rate of VAT in the European Union Gebauer et al (2007). evaluate the effect of VAT reform models on VAT evasion in the EU in general and in Germany in particular Hybka (2009).…”

“…evaluate the effect of VAT reform models on VAT evasion in the EU in general and in Germany in particular Hybka (2009). estimates and explains collection efficiency in Poland over time.5 See, for example,Aizenman and Jinjarak (2008); De Mello (2009) andGebauer et al (2007).6 Among 142 countries listed as having a VAT inBird and Gendron (2007, pp. 223-226), 76 countries have one rate, 32 countries have two rates, and 25 countries have 3 rates.…”