Administrative And Compliance Costs Of Vats In Selected Oecd Countries

The value added tax (VAT), just like other taxes, involves costs, both for the tax department to operate and enforce it (administrative costs) and for businesses to carry out the obligations of calculating and paying the tax (compliance costs). The size of administrative and compliance costs should be an important consideration in weighing the advantages and disadvantages of the VAT and in designing the tax once the decision to adopt it has been made. Also, administrative and compliance costs can increase, by placing excessive emphasis on procedural and accounting in VAT operation. Therefore, administrative and compliance costs should be considered in combination. Thus, the focus should be on total operating costs and minimization of these costs.

The following questions have been addressed in this article:

How should e-commerce providers be made to comply with their obligations?
What tax rate should be applied to the transaction
What is the common problem with collecting the VAT in EU-countries
What are the approaches toward the control and audit of the VAT

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