Summary: Fundamentals Of Eu Vat Law | 9789041170170 | Ad van Doesum, et al

Read the summary and the most important questions on Fundamentals of EU VAT Law | 9789041170170 | Ad van Doesum; Herman van Kesteren

• 1 Introduction

• 1.1 Introduction

• What were the reasons behind the implementation of turnover taxes in various European countries during different historical periods?

  • To cover the costs of crisis or war, such as the expenses of the First World War
  • France (1920) and Belgium (1921) introduced general turnover taxes for this purpose
  • UK introduced excise duties in 1940, and the Netherlands in 1934, as responses to crisis
  • Turnover taxes, often introduced as 'temporary' measures, became permanent in most European countries

• How did the concept of VAT evolve within the European Economic Community (EEC) which later became the European Union (EU)?

  • In 1967, EEC Member States including Belgium, France, West Germany, the Netherlands, Italy, and Luxembourg agreed to harmonize their turnover taxes
  • They opted for a common system of turnover tax in the form of Value Added Tax (VAT)
  • VAT has become a significant source of tax revenue in all EU Member States, generating approximately EUR 1,047 billion per year

• 1.2 Terminology: 'Consumption Tax', 'Indirect Tax', 'Turnover Tax' and 'VAT'

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• How can consumption taxes be defined and what do they aim to tax?

  • Defined as taxes targeting the private consumption of goods/services
  • May be interpreted as a tax on everything a private consumer consumes
  • Also viewed as a tax that effectively taxes income (at the time it is consumed)
  • Or considered a tax on the expenditure of private consumers

• What is a consumption tax like, specifically the European VAT?

  • Considered a tax on everything a private consumer consumes
  • Uses the expenditure of private individuals to establish the monetary value of consumption
  • Factors affecting this interpretation include challenges in defining consumption and intervals between purchase and actual consumption
  • Monetary value of a good must be determined to levy the tax

• What challenges arise in defining 'consumption' in the context of consumption taxes?

  • Difficulties in defining whether a good is actually consumed
  • Potential interval between purchase expenditure and actual consumption
  • Some goods may be 'consumed' over an extended period of time

• Why are consumption taxes typically levied indirectly instead of directly on private individuals?

  • Tax system difficult for authorities to control
  • Supply of goods and services by suppliers taxed instead
  • Idea that taxing supply eventually taxes private consumption
  • Taxing consumption indirectly implies further abstraction

• What are the two classes of consumption tax and how do they differ?

  • Specific consumption tax: taxes certain goods/services (e.g., excise duties)
  • General consumption tax: taxes all goods/services consumed
  • EU VAT is a general tax on consumption

• How do general taxes on consumption differ in terms of their form?

  • Single-stage taxes: imposed on one leg of production/distribution chain
  • Multiple-stage taxes: imposed on supplies in more than one chain leg
  • EU VAT is an all-stages tax, levied on all supplies made until retail trade stage

• What is the implicit assumption behind taxing the supply of goods and services instead of private consumption directly?

  • Entrepreneur includes consumption tax in prices
  • Tax on supply eventually taxes private consumption
  • Further abstraction from taxing private consumption accepted

• What does the term 'EU VAT' refer to, in relation to consumption taxes?

  • General tax on consumption
  • All-stages tax imposed on all supplies of goods/services up to retail trade stage
  • EU VAT is one manifestation of a turnover tax and a form of consumption tax