The Value-Added Tax (VAT) administration benchmarking: A case study of Western European countries
DOI:
https://doi.org/10.15549/jeecar.v10i5.1240Keywords:
VAT, tax base, tax rates, VAT revenue ratio, optimal model, VAT gapAbstract
Given the instability of the economic environment, governments of even highly developed countries are facing the question of implementing changes to the VAT administration system. The study aims to analyse the specifics of VAT administration and accounting procedures in Western European countries based on the formation of criteria for the optimal administration model. The resulting criteria for the optimality of the VAT administration and accounting system serve as a basis for implementing changes to the current VAT administration models in the countries where this tax is not a key source of budget revenue yet, and for the countries that strive to increase the stability and volume of VAT revenues.
References
Abdin, J. (2018). Relationship between taxation and economic development of a country. SSRN. https://ssrn.com/abstract=3295458
Acemoglu, D., Laibson, D., & List, J. A. (2018). Macroeconomic (2d ed.). PEARSON.
Acosta-Ormaechea, S., & Morozumi, A. (2021). The value-added tax and growth: Design matters. International Tax and Public Finance, 5(28), 1211–1241. https://doi.org/10.1007/s10797-021-09681-2 DOI: https://doi.org/10.1007/s10797-021-09681-2
Ahmad, E., & Stern, N. (1991). The theory and practice of tax reform in developing countries. Cambridge University Press.
Anggadini, S. D., Surtikanti, S., Bramasto, A., & Fahrana, E. (2022). Determination of Individual Taxpayer Compliance in Indonesia: A Case Study. Journal of Eastern European and Central Asian Research (JEECAR), 9(1), 129-137. https://doi.org/10.15549/jeecar.v9i1.883 DOI: https://doi.org/10.15549/jeecar.v9i1.883
Asen, E. (2019, October 24). Comparing Europe's tax systems: Consumption taxes. Tax Foundation. Retrieved December 13, 2022, from https://taxfoundation.org/worst-consumption-tax-systems-europe-2019/
Asen, E. (2021, January 7). 2021 VAT rates in Europe. Tax Foundation. https://taxfoundation.org/value-added-tax-2021-vat-rates-in-europe
Avalara. (n.d.). Europe VAT and indirect tax country guides. Retrieved December 13, 2022, from https://www.avalara.com/vatlive/en/country-guides/europe.html
Ayoub, Z., & Mukherjee, S. (2019). Value added tax and economic growth: An empirical study of China perspective. Signifikan: Jurnal Ilmu Ekonomi, 8(2), 235–242. https://doi.org/10.15408/sjie.v8i2.10155 DOI: https://doi.org/10.15408/sjie.v8i2.10155
Baker McKenzie (2022). European Union: EU council approves fundamental overhaul of VAT rates. https://insightplus.bakermckenzie.com/bm/tax/europe-eu-council-approves-fundamental-overhaul-of-vat-rates
Baskaran, T., & da Fonseca, M. L. (2014). The economics and empirics of tax competition: A survey and lessons for the EU. Erasmus Law Review, 7(1):1-23. http://dx.doi.org/10.5553/elr.000015 DOI: https://doi.org/10.5553/ELR.000015
Bunn, D. (2021, December 2). Comparing Europe's tax systems: Consumption taxes. Tax Foundation. https://taxfoundation.org/comparing-europes-tax-systems-consumption-taxes/
Bunn, D., & Asen, E. (2020). International tax competitiveness Index 2020. Tax Foundation. https://files.taxfoundation.org/20201009154525/2020-International-Tax-Competitiveness-Index.pdf#page=23
Business.gov.nl. (n.d.). VAT for resident businesses. Retrieved December 13, 2022, from https://business.gov.nl/regulation/vat/?gclid=CjwKCAjw4ayUBhA4EiwATWyBrqjq8RznUkVU1150tqqrMt5O4xcvqTID4fSi4S4pFf-lNus_4S76wxoCHoAQAvD_BwE
CBO (2018). Options for Reducing the Deficit: 2019 to 2028. https://www.cbo.gov/publication/54667
Ch.Ch. (2021). Value-added tax (VAT). Retrieved December 13, 2022, from https://www.ch.ch/en/taxes-and-finances/types-of-taxation/value-added-tax--vat-/
Corbett, T. (2020). The impact of COVID-19 on VAT/GST regimes: Five areas that could change. PwC Global. https://www.pwc.com/gx/en/services/tax/publications/the-impact-of-covid-19-on-vat-gst-regimes.html
Dahal, A. R. (2020). Role of value added tax in total tax revenue: An empirical study of Nepal. Journal of Population and Development, 1(1), 1-12. https://doi.org/10.3126/jpd.v1i1.33099 DOI: https://doi.org/10.3126/jpd.v1i1.33099
De Mooij, R., & Swistak, A. (2022). Value-added tax continues to expand. Finance & Development. https://www.imf.org/en/Publications/fandd/issues/2022/03/b2b-value-added-tax-continues-to-expand
Dore, K. (2021, June 21). The value-added tax brings in billions for other countries, but the U.S. doesn't have one. CNBS. Retrieved December 13, 2022, from https://www.cnbc.com/2021/06/21/this-tax-brings-in-billions-worldwide-why-theres-no-vat-in-the-us.html
European Commission, Directorate-General for Taxation and Customs Union. (2021). VAT gap in the EU: Report 2021. Publications Office of the European Union. https://data.europa.eu/doi/10.2778/447556
European Commission. (2021a). VAT gap: While gap continues to decrease, EU countries lost €134 billion in VAT revenues in 2019. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6466
European Commission. (2021b). New rules on VAT rates offer Member States more flexibility while supporting the EU's green, digital and public health priorities. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6608
European Commission. (n.d.). Value-added tax. https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/revenue/own-resources/value-added-tax_en
French Business Advice (2020, September 30). Important rules about VAT in France. Retrieved December 13, 2022, from https://www.frenchbusinessadvice.com/vat-in-france
Fuller, D., & Geide-Stevenson, D. (2014). Consensus Among Economists – An Update. The Journal of Economic Education, 45(2), 131–146. https://doi.org/10.1080/00220485.2014.889963 DOI: https://doi.org/10.1080/00220485.2014.889963
Hassan, B. (2015). The role of Value Added Tax (VAT) in the Economic Growth of Pakistan. Journal of Economics and Sustainable Development, 13(6), 174-183. https://iiste.org/Journals/index.php/JEDS/article/view/24288
Helgason, A. F. (2017). Unleashing the 'money machine': The domestic political foundations of VAT adoption. Socio-Economic Review, 15(4), 797-813. https://doi.org/10.1093/ser/mwx004 DOI: https://doi.org/10.1093/ser/mwx004
Hody, O., Roelands, B., & Shinde, S. (2022). Pan European VAT update - Q1 2022. In Deloitte Global Tax Center (Europe). Deloitte GTC, Europe. https://www2.deloitte.com/content/dam/Deloitte/be/Documents/GTC%20webinar%20-%20Q1%202022.pdf
Jalata, D. M. (2014). The Role of value added tax on economic growth of Ethiopia. Science, Technology and Arts Research Journal, 1(3), 156–161. http://dx.doi.org/10.4314/star.v3i1.26 DOI: https://doi.org/10.4314/star.v3i1.26
Jurva, K. (2016, November). Effective taxation policies to promote equitable growth and development. UNU-WIDER. https://www.wider.unu.edu/publication/effective-taxation-policies-promote-equitable-growth-and-development
Kalmuk, A. (2021, March 17). EU economy: Analysis of statistics for 2020 and forecast for 2021. Immigrant Invest. https://immigrantinvest.com/insider/eu-economy-stats-2020-en
Kendall, M.G. (1970). Rank correlation methods (4th ed.). Griffin.
Keshavarz Ghorabaee, M., Zavadskas, E. K., Olfat, L., & Turskis, Z. (2015). Multi-criteria inventory classification using a new method of evaluation based on distance from average solution (EDAS). Informatica, 26(3), 435-451. https://doi.org/10.15388/Informatica.2015.57 DOI: https://doi.org/10.15388/Informatica.2015.57
Klatt, A. (2021, October 22). Austria VAT Rate 2020: Reduced Tax Rates, VAT Exemption, Refund. Hellotax. https://www.hellotax.com/blog/taxation/vat-rate/austria/?gclid=Cj0KCQjwhLKUBhDiARIsAMaTLnE3iXzx7MQ0F7PRJtSpQHXn1b7IKlfjGcbltrMAC1Q1Ny5XsBUoMrsaAqrHEALw_wcB (Accessed 1 July 2022).
Locher, T. (2021a, June 17). VAT bases in Europe. Tax Foundation. https://taxfoundation.org/value-added-tax-bases-europe/
Locher, T. (2021b, July 1). VAT Exemption Thresholds in Europe. Tax Foundation. https://taxfoundation.org/vat-exemption-thresholds-europe-2021/
Lovat Compliance. (2022). Luxembourg. Retrieved December 13, 2022, from https://vatcompliance.co/countries/luxembourg-vat-guide/#:~:text=VAT%20returns%20filing%20and%20VAT%20payment%20date&text=The%20tax%20must%20be%20paid,which%20the%20tax%20was%20accrued
Marosa. (n.d.). Belgian VAT Returns. Retrieved December 13, 2022, from https://marosavat.com/manual/vat/belgium/returns/#:~:text=As%20a%20general%20rule%2C%20Belgian,paid)%20by%20August%2010th
Masca, S. G., & Leleu, D. (2022). An Analysis of VAT efficiency in the European Union. Retrieved December 13, 2022, from http://dx.doi.org/10.2139/ssrn.4157934 DOI: https://doi.org/10.2139/ssrn.4157934
Maunder, S. (2022, June 27). Corporate tax rates in Belgium. Expatica. Retrieved December 13, 2022, from https://www.expatica.com/be/finance/taxes/corporate-tax-in-belgium-136650/#:~:text=There%20is%20also%20a%20VAT,also%20from%20claiming%20it%20back
N26. (2022, January 21). Your guide to VAT in Germany. Retrieved December 13, 2022, from https://n26.com/en-de/blog/different-vat-types
Neog, Y., & Gaur, A. (2020). Tax structure and economic growth: a study of selected Indian states. Journal of Economic Structures, 9(1), article number 38. https://doi.org/10.1186/s40008-020-00215-3 DOI: https://doi.org/10.1186/s40008-020-00215-3
OECD. (2019). Revenue statistics 2019. OECD Publishing. https://doi.org/10.1787/0bbc27da-en DOI: https://doi.org/10.1787/0bbc27da-en
OECD. (2020). Consumption tax trends 2020: VAT/GST and excise rates, trends and policy issues. OECD Publishing, Paris. https://doi.org/10.1787/152def2d-en DOI: https://doi.org/10.1787/152def2d-en
OECD. (2022). Revenue statistics: Key findings for Switzerland. https://www.oecd.org/tax/tax-policy/revenue-statistics-switzerland.pdf
Olexová, C., Sudzina, F., & Cakoci, K. (2022). The VAT gap in relation to the quality of governance in selected CEE countries. Journal of Eastern European and Central Asian Research (JEECAR), 9(3), 385-398. https://doi.org/10.15549/jeecar.v9i3.791 DOI: https://doi.org/10.15549/jeecar.v9i3.791
Owino, O. B. (2019). An empirical analysis of value added tax on economic growth, evidence from Kenya data set. Journal of Economics, Management and Trade, 22(3), 1–14. https://doi.org/10.9734/JEMT/2019/46167 DOI: https://doi.org/10.9734/JEMT/2019/46167
Piontkivska, I. (2020). Taxes around the world: Why we need taxes and what makes a good tax policy? Vox Ukraine. https://voxukraine.org/en/taxes-around-the-world-why-we-need-taxes-and-what-makes-a-good-tax-policy
Polec, T. (2022, November 1). What VAT applies in France? Taxology. Retrieved December 13, 2022, from https://taxology.co/what-vat-applies-in-france/#:~:text=The%20basic%20VAT%20rate%20in,production%20or%20service%20creation%20process
Pugachev A. A., Parfyenova L. B., & Podvezko A. (2019). Assessment of tax competition influence on national tax system competitiveness. Taxes and Taxation, 12(4), 143-155. https://www.researchgate.net/publication/335694651_Assessment_of_Tax_competition_Influence_on_National_Tax_System_Competitiveness DOI: https://doi.org/10.26794/1999-849X-2019-12-4-143-155
PWC. (2022, July 18). Value-added tax (VAT). Retrieved December 13, 2022, from https://taxsummaries.pwc.com/belgium/corporate/other-taxes#:~:text=The%20standard%20VAT%20rate%20is,Phytopharmaceutical%20products
Revenue. (2022). What is VAT? https://www.revenue.ie/en/vat/what-is-vat/index.aspx
Sarwar, S., Streimikiene, D., Waheed, R., Dignah, A., & Mikalauskiene, A. (2021). Does the Vision 2030 and Value Added Tax Leads to Sustainable Economic Growth: The Case of Saudi Arabia? Sustainability, 13(19), article number 11090. https://doi.org/10.3390/su131911090 DOI: https://doi.org/10.3390/su131911090
SIG Fiduciaire. (2022, July 11). VAT in Switzerland. Retrieved December 16, 2022, from https://www.companyformationswitzerland.com/vat-in-switzerland
Statista. (2021a). VAT standard tax rates in the European Union in 2019. https://www.statista.com/statistics/1175825/vat-tax-rates-in-europe
Statista. (2021b). VAT Tax Revenues in the European Union in 2019. https://www.statista.com/statistics/1175857/vat-tax-revenues-eu/
Statista. (2022). Annual gross domestic product (GDP) growth projections for the U.S., U.K., Germany and Western Europe from 2010 to 2025. https://www.statista.com/statistics/369222/gdp-growth-forecast-western-europe-vs-major-economies/#:~:text=GDP%20growth%20forecast%3A%20Western%20Europe%2C%20U.S.%2C,U.K.%20and%20Germany%202010-2023&text=In%202020%2C%20Gross%20domestic%20product,and%20-4.85%20percent%2C%20respectively
Swank, D. (2016). The new political economy of taxation in the developing world. Review of International Political Economy, 23(2), 185-207. DOI: https://doi.org/10.1080/09692290.2016.1155472
The World Bank. (n.d.). Paying taxes. Why it matters? https://subnational.doingbusiness.org/en/data/exploretopics/paying-taxes/why-matters#:~:text=Taxation%20not%20only%20pays%20for,determine%20a%20government%27s%20very%20legitimacy
TMF Group. (n.d.). VAT in Germany. Retrieved December 16, 2022, from https://www.tmf-group.com/en/services/companies/accounting-tax/vat/country-profile/germany
UNECE. (n.d.). Gross average monthly wages by country and year. https://w3.unece.org/PXWeb2015/pxweb/en/STAT/STAT__20-ME__3-MELF/60_en_MECCWagesY_r.px/table/tableViewLayout1
Vat Update. (2021). VAT rates in Switzerland. https://www.vatupdate.com/2021/04/22/vat-rates-in-switzerland
WorldData.info. (n.d.). Average income around the world. Retrieved December 16, 2022, from https://www.worlddata.info/average-income.php
Your Europe. (2022). VAT rules and rates. Retrieved December 16, 2022, from https://europa.eu/youreurope/business/taxation/vat/vat-rules-rates/index_en.htm
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Alla Shapovalova, Olesia Demianyshyna, Nataliia Kudlaieva, Mariia Plekan, Svitlana Skrypnyk
This work is licensed under a Creative Commons Attribution 4.0 International License.
The JEECAR journal allows the author(s) to hold the copyright and publishing rights of their own manuscript without restrictions.
This journal applies the Creative Attribution Common License to works we publish, and allows reuse and remixing of its content, in accordance with a CC-BY 4.0 license.
Authors are free to: Share — copy and redistribute the material in any medium or format and Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions — The author may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
The JEECAR Journal is committed to the editorial principles of all aspects of publication ethics and publication malpractice as assigned by the Committee on Public Ethics.
