Theories of Consumption and the Consequences of Partial Taxation of Financial Services
While the VAT is technically a tax imposed on registered enterprises making taxable supplies, it is designed to be a consumption tax, borne by persons making acquisitions for final consumption. The initial step when designing a law intended to tax persona
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VAT and Financial Services Comparative Law and Economic Perspectives
VAT and Financial Services
Robert F. van Brederode Richard Krever Editors
VAT and Financial Services Comparative Law and Economic Perspectives
123
Editors Robert F. van Brederode Crowe Horwath LLP Atlanta, GA USA
ISBN 978-981-10-3463-3 DOI 10.1007/978-981-10-3465-7
Richard Krever Monash Business School Monash University Melbourne, VIC Australia
ISBN 978-981-10-3465-7
(eBook)
Library of Congress Control Number: 2016963325 © Springer Nature Singapore Pte Ltd. 2017 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore
Preface
For over half a century, countries have struggled to reconcile the principles and design of a VAT or GST system and the unique features of financial supplies. A VAT taxes the value of transactions, which is relatively straightforward where explicit fees are charged, but intriguingly difficult where implicit fees are charged as is the case with some types of financial services. At the same time, the VAT has mechanisms to remove tax from business-to-business transactions involving no final consumption but these, too, are difficult to apply to some types of financial services. The fundamental design features of the tax also appear problematic in terms of the goal of removing tax from pure savings in the form of financial instruments. Relieving financial services from the tax altogether runs counter to the character of the VAT as a broad-based tax levied on all final consumption. Equally at odds with the design principle of the VAT is imposing a limited tax on business-to-business transactions along the supply chain or imposing a limited ta
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