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Notes
1 See R van Brederode, Systems of General Sales Taxation (2009) Kluwer Law International 27–28; B Terra and J Kajus, A Guide to the European VAT Directives (2014) IBFD Publication BV, 314; A Schenk, V Thuronyi and W Cui, Value Added Tax (2015) Cambridge University Press, 26 et seq.
2 See Art 1(2) of the European VAT Directive (Directive 2006/112/EC).
3 See J Englisch, in M Lang, P Melz and E Kristoffersson (eds), Value Addedd Tax and Direct Taxation (2009), VAT/GST and Direct Taxes: Different Purposes. IBFD Publication BV, 1–2.
4 This is the predominant position among German scholars; for an overview of academic literature, see Englisch, ibid 1, 22 n 90. This view is also shared by many international scholars, see Abella Poblet (Spain), Manual del IVA (2006) 112; Alonso González (Spain), Fraude y delito fiscal en el IVA (2008) 19 et seq; Amatucci (Italy), L'Ordinamento Giuridico Della Finanza Pubbblica2007) 82; Break (US), in Pechman (ed), The Promise of Tax Reform 1985) 128, 139); Casalta Nabais (Portugal), O Dever Fundamental de Pagar Impuestos (2004) 480 et seq; Cerioni and Herrera (Italy/Spain), in Lang et al (eds), Value Added Tax and Direct Taxation (2009) 571, 573 et seq; Coimbra Silva (Brazil), in Silva, Bernades and Fonseca (eds), Tributação sobre o Consumo (2008) 321, 331; Comelli (Italy), IVA comunitaria e IVA nazionale (2000) 998 et seq; Herrera Molina (Spain), Capacidad Económica y sistema fiscal (1998) 456; Lobo Torres (Brasil), Tratado de Direito Constitucional Financeiro e Tributário II (2005) 310; De Mita (Italy), in Ferraz (ed), Princípios e Limites da Tributação231; Mollard (Switzerland), Archiv für schweizerisches Abgaberecht (1994) 443, 463); Ruppe and Achatz (Austria), Umsatzsteuergesetz (4th ed, , 2011) para 32; Sullivan (US), The Tax on Value Added (1965) 4, 20; and probably also Ávila (Brasil), Sistema constitucional tributário (3rd ed, 2007) 389 et seq; and van Hilten (Netherlands), in Albregtse and Kogels (eds), Selected Issues in European Tax Law 6.
5 See C K Sullivan, The Tax on Value Added (1965) New York, Columbia University Press 5; S Cnossen, Evaluating the National Retail Sales Tax from a VAT Perspective, in Zodrow and Mieszkowski (eds), United States Tax Reform in the 21st Century (2002) Cambridge University Press 215, 216.
6 See L Ebrill, M Keen, J Bodin and V Summers, The Modern VAT (2001) Washington: International Monetary Fund 18–19; OECD, Consumption Tax Trends (2014) 21.
7 See OECD, International VAT/GST Guidelines (2006), para 4: ‘the destination principle . . . is the international norm'; OECD, Consumption Tax Trends (2014) 24; see also A Schenk, V Thuronyi and W Cui, Value Added Tax (2015) Cambridge University Press 195 et seq.
8 See A Tait, Value Added Tax (1972) International Monetary Fund 19–20; S Cnossen, EC Tax Review (2009) 193; OECD, Consumption Tax Trends (2014) 19. For a different view on the collection mechanism, see R van Brederode and S Pfeiffer, VAT's Superiority: Is the Emperor Dressed like Adam? (IVM, 2015), 226, 229–230; however, van Brederode and Pfeiffer base their analysis on the final VAT burdens of the suppliers in the chain (by definition, zero in a tax on consumption), rather than on net VAT liabilities of each supplier vis-à-vis the treasury, which is what matters for an adequate description of the collection mechanism, however.
9 For further detail, see A Schenk, V Thuronyi and W Cui, Value Added Tax (2015) Cambridge University Press 28 et seq; J Englisch, in Tipke, / Lang, Steuerrecht (22nd ed, 2015) § 17, para. 460 et seq.
10 See OECD International VAT/GST Guidelines, Guidelines on Neutrality (2011) para 15; I Lejeune and J Daou, VAT Neutrality from an EU Perspective, in Lang and Lejeune (eds), Improving VAT/GST (2014) IBFD Publication BV 459, 463–464; European Court of Justice (ECJ) 30 September 2010, case C-392/09, Uszodaépítö, ECR 2010, I- 8791, para 34; 12 May 2011, case C-107/10, Enel Maritsa Iztok 3, ECR 2011, I-3873, para 32; 28 July 2011, case C-274/10, Commission/Hungary, ECR 2011, I-7289, para 43.
11 For further details, see A Tait, Value Added Tax—International Practice and Problems (1988) International Monetary Fund 306 et seq; PSP, Planspiel zur systembezogenen Änderung bei der Umsatzsteuer—‘Reverse-Charge-Verfahren' (2005) 12 et seq; S Melhardt, Reverse Charge, Chancen und Risiken einer generellen Änderung des MwSt-Systems, in Quantschnigg et al (eds), Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 274; I Lejeune and J Daou, VAT Neutrality from an EU Perspective, in Lang and Lejeune (eds), Improving VAT/GST (2014) IBFD Publication BV 617 et seq; see also EU Commission, Study to Quantify and Analyse the VAT Gap in the EU Member States, 2015 Report, TAXUD/2013/DE/321, May 2015.
12 For further details, see ECJ 12 January 2006, case C-354/03 and others, Optigen, Fulcrum und Bond House, ECR 2006, I-483; B Spilker, Der Leistungsempfänger als Schuldner der Mehrwertsteuer in der EU (2006) Verlag des Wissenschaftlichen Instituts der Steuerberater 169 et seq; A González, Fraude y delito fiscal en el IVA (2008) MARCIAL PONS 249 et seq (Truchas y fraude carrusel); S Cnossen, Halting the Horses: EU Policy on the VAT Carousel Fraud in the EU Emsissions Trading System EC Tax Review (2009) 192 et seq; M Tumpel, in Bizioli (ed), Essays in International and European Tax Law (2010) Jovene 149, 152 et seq; R Wolf, Carrouselfraude (2010); R Wolf, VAT Carousel Fraud: A European Problem from a Dutch Perspective, Intertax (2011) 26; P Efstratios, EC Tax Review (2012) Kluwer Law International 39; M Tumpel and G Wurm, Extension of Reverse-Charge: A Solution to Combat VAT Fraud? in Ecker, Lang and Lejeune (eds), The Future of Indirect Taxation (2012) Kluwer Law International 587, 593 et seq; R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146 et seq.
13 See also W Widmann, Umsatzsteuer-Kongress-Bericht 2001/2002 (2002) Schmidt 63, 74); J Kraeusel, Die Zukunft der Umsatzsteuer aus deutscher Sicht - Risiken, Chancen und Perspektiven, in Festschrift Reiß (2008) Schmidt 297, 307.
14 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 226, 231, even though with less detail regarding the combination of factors necessary for a default to result in significant revenue losses under a VAT system, too, and with the implicit assumption that revenue losses may even be higher due to a failure to include the VAT liability on output supplies in the tax return by which input VAT is claimed.
15 See ECJ 15 May 2014, case C-337/13, Almos Agrárkülkereskedelmi, EU:C:2014:328, para 22.
16 See S Homburg and C Rublack, Anmerkungen zum Umsatzsteuergesetzbuch, einem Vorschlag zur Umsatzsteuer-reform in Seer, Hey and J Englisch (eds), Festschrift für Joachim Lang (2010) Schmidt 893, 900.
17 See Art 63 of the VAT Directive; B Terra and J Kajus, A Guide to the European VAT Directives (2014) IBFD Publication BV 725 et seq.
18 See S Homburg and C Rublack, Anmerkungen zum Umsatzsteuergesetzbuch, einem Vorschlag zur Umsatzsteuer-reform in Seer, Hey and J Englisch (eds), Festschrift für Joachim Lang (2010) Schmidt 893, 896.
19 For further details, see http://ec.europa.eu/taxation_customs/taxation/vat/key_documents/expert_group/index_en.htm. The author has been appointed as a member of this group since its conception in 2012.
20 See also M Tumpel and G Wurm, Extension of Reverse-Charge: A Solution to Combat VAT Fraud? in Ecker, Lang and Lejeune (eds), The Future of Indirect Taxation (2012) Kluwer Law International 587, 604.
21 See Communication from the Commission to the Council in accordance with Article 27(3) of Directive 77/388/EEC, COM(2006) 404 final; S Melhardt, Reverse Charge, Chancen und Risiken einer generellen Änderung des MwSt-Systems, in Quantschnigg et al (eds), Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 279; M Tumpel and G Wurm, Extension of Reverse-Charge: A Solution to Combat VAT Fraud? in Ecker, Lang and Lejeune (eds), The Future of Indirect Taxation (2012) Kluwer Law International 587, 600–602.
22 See EU Commission, Press Release IP/06/1023, of 19 July 2006; accessible at http://europa.eu/rapid/press-release_IP-06–1023_en.htm?locale=en.
23 See EU Commission, Green Paper on the future of VAT of 1 December 2010, COM(2010) 695 final, 8–9.
24 See Communication from the Commission of 28 October 2015, COM(2015) 538 final.
25 See Communication from the Commission of 28 October 2015, COM(2015) 538 final, 4.
26 For a detailed description, see W Hellerstein, State and Local Taxation (10th ed, 2014) West, St. Paul.
27 For details, see R van Brederode, Systems of General Sales Taxation (2009) Kluwer Law International 73 et seq.
28 See also S Cnossen, EC Tax Review (2009) 192–193, regarding the German-Austrian proposal of 2006 which was based on refinements of the Mittler model.
29 See G Mittler, Umsatzsteuer-Rundschau (2001) 385 et seq; G Mittler, Umsatzsteuer-Rundschau (2004) 1 et seq; W Widmann, Umsatzsteuer-Rundschau (2002) 14 et seq; W Widmann, Umsatzsteuer-Kongress-Bericht 2001/2002 (2002) Schmidt 63 et seq. For conceptually similar proposals, see also M Tumpel, A Hybrid VAT System in the European Union (2007) 47 Tax Notes international 165 et seq; R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146 et seq.
30 See Finanzministerkonferenz, Umsatzsteuer-Rundschau, 2005) 662. For a detailed description, see P Matheis and S Groß, Best of Both Worlds? – Lösungsansätze zur Ausgestaltung und Umsetzung des Reverse-Charge-Verfahrens Umsatzsteuer-Rundschau (2006) 379 et seq; J Kraeusel, in Festschrift Reiß (2008) Schmidt 297, 309 et seq.
31 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146, 153, who suggest that only fully exempt businesses should be disqualified from obtaining a VAT ID.
32 See also S Melhardt, Reverse Charge - Chancen und Risiken einer generellen Änderung des MwSt-Systems, in Quantschnigg et al (eds), Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 277, who suggests a threshold of 10,000 euro. This amount corresponds to the one proposed in the 2005 and 2015 Austrian derogation request mentioned above.
33 See M Tumpel and G Wurm, Extension of Reverse Charge: A Solution to Combat VAT Fraud? in Ecker, Lang and Lejeune (eds), The Future of Indirect Taxation, (2012) Kluwer Law International 587, 598.
34 See P Kirchhof, Umsatzsteuer Gesetzbuch (2008) C.F. Müller; P Kirchhof, Bundessteuergesetzbuch (vol 4: Umsatzsteuer, 2011) C.F. Müller.
35 See also A Gebauer, C W Nam and R Parsche, Can Reform Models of Value Added Taxation Stop the VAT Evasion and Revenue Shortfalls in the EU? (2007) Journal of Economic Policy Reform 1, 10; D Kempf, Die Einführung des Reverse-Charge-Verfahrens als Möglichkeit der Bekämpfung von Umsatzsteuerausfällen und seine praktischen Probleme, in Festschrift Reiß (2008) 275, 285; S Melhardt, in Quantschnigg et al (eds), Reverse Charge - Chancen und Risiken einer generellen Änderung des MWSt.-Systems Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 274.
36 See J Kraeusel, Die Zukunft der Umsatzsteuer aus deutscher Sicht - Risiken, Chancen und Perspektiven in Festschrift Reiß, 2008) Dr. Otto Schmidt 297, 312–314; A Gebauer, C W Nam and R Parsche, Can Reform Models of Value Added Taxation Stop the VAT Evasion and Revenue Shortfalls in the EU? (2007) Journal of Economic Policy Reform, Taylor & Francis 1, 10.
37 See Communication from the Commission to the Council in accordance with Article 27(3) of Directive 77/388/EEC, COM(2006) 404 final, p. 7; A Gebauer, C W Nam and R Parsche, Can Reform Models of Value Added Taxation Stop the VAT Evasion and Revenue Shortfalls in th EU? (2007) Journal of Economic Policy Reform 1, 10; S Cnossen, EC Tax Review (2009) 194–195.
38 See R van Brederode and S Pfeiffer, VAT's Superiority: Is the Emperor Dressed Like Adam? (IVM 2015) 226, 229. The authors doubt, though, that business owners would be significantly more inclined to engage into this kind of fraudulent behaviour, as compared with making false statements about the actual (private) use of their purchases in their tax returns under the current regime, and thereby fraudulently claiming an input VAT deduction; see R van Brederode and S Pfeiffer, VAT's Superiority: Is the Emperor Dressed Like Adam? (IVM 2015) 226, 233.
39 See also S Melhardt, in Quantschnigg et al (eds), Reverse Charge - Chancen und Risiken einer generellen Änderung des MWSt.-Systems Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 276.
40 This is emphasized by M Tumpel and G Wurm, Extension of Reverse-Charge: A Solution to Combat VAT Fraud? in T Ecker, J Lang and I Lejeune (eds), The Future of Indirect Taxation (2012) Kluwer Law International 587, 598–599 and 602.
41 For a similar assessment of the transaction-related thresholds, see R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM 2015). 146, 156. Their alternative proposal (ibid 154) of setting a high registration threshold (similar to the current small business exemption in EU Member States, but at 100,000 to 200,000 euro of annual turnover) is in all likelihood not as effective as a per-transaction threshold in curbing micro fraud, and it has additional disadvantages. In particular, it implies significant VAT revenue losses and distortions of competition.
42 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM 2015) 146, 153: Avoidance of cash flow disparities.
43 See Communication from the Commission on measures to change the VAT system to fight fraud, COM(2008) 109 final, 8.
44 See, in this regard, R van Brederode and S Pfeiffer, VAT's Superiority: Is the Emperor Dressed Like Adam? (IVM 2015) 226, 228.
45 See S Homburg and C Rublack, Anmerkungen zum Umsatzsteuergesetzbuch, einem Vorschlag zur Umsatzsteuer-reform in Festschrift für Joachim Lang (2010) Dr. Otto Schmidt 893, 896.
46 See S Melhardt, Reverse Charge - Chancen und Risiken einer generellen Änderung des MWSt.-Systems, in Quantschnigg et al (eds), Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 274.
47 See Communication from the Commission on measures to change the VAT system to fight fraud, COM(2008) 109 final, 8; S Cnossen, EC Tax Review (2009) Kluwer Law International 193; B Terra and J Kajus, A Guide to the European VAT Directives (2014) IBFD 308–309. This is also regarded as a minimum requirement (eventually even to be complemented by additional safeguards, e.g. in case of cash payments or the sale of typical consumer goods) by R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146, 153–154, and also in n 45).
48 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146, 153.
49 For a different suggestion regarding a transition to a general reverse charge system, see S Melhardt, Reverse Charge - Chancen und Risiken einer generellen Änderung des MWSt.-Systems in Quantschnigg et al (eds), Festschrift für Wolfgang Nolz (2008) LexisNexis 271, 282: recapitulative statements should be sufficient.
50 See G Harrison and R Krelove, ‘VAT Refunds: A Review of Country Experience', IMF Working Paper No 05/218; Kempf, Die Einführung des Reverse-Charge-Verfahrens als Möglichkeit der Bekämpfung von Umsatzsteuerausfällen und seine praktischen Probleme in Festschrift Reiß (2008) Dr. Otto Schmidt 275, 289–290.
51 See Communication from the Commission on measures to change the VAT system to fight fraud, COM(2008) 109 final, 9.
52 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015) 146, 153: ‘in the current system of VAT ID issuance [the scrutiny of VAT ID requests] plays a very minor role. Enhancing such processes would require time and manpower to determine the status of taxable persons beforehand’.
53 See P Kirchhof, Bundessteuergesetzbuch (vol 4: Umsatzsteuer, 2011) C. F. Müller § 111 para 1: only a few zero-rated categories of supplies would remain.
54 See J Englisch, The EU Perspective on VAT Exemptions, in R de la Feria (ed), VAT Exemptions (2013) (, ) Wolters Kluwer Law & Business 37, 60 et seq).
55 See S Homburg and C Rublack, Anmerkungen zum Umsatzsteuergesetzbuch, einem Vorschlag zur Umsatzsteuer-reform in Festschrift für Joachim Lang ?(2010) Dr. Otto Schmidt 893, 898–899. This is questioned, but without any empirical underpinnings, by M Tumpel and G Wurm, Extension of Reverse-Charge: A Solution to Combat VAT Fraud? in T Ecker, J Lang, I Lejeune (eds), The Future of Indirect Taxation (2012) Kluwer Law International 587, 603.
56 See S Cnossen, EC Tax Review (2009) Kluwer Law International 194; see also A Tait, Value Added Tax—International Practice and Problems (1988) International Monetary Fund 19, regarding the Norwegian VAT system: 90% of all VAT revenue was collected by less than 20% of all registered businesses at that time.
57 Regarding the importance of taxing B2B imports, in particular, see A Tait, Value Added Tax—International Practice and Problems (1988) International Monetary Fund 19; L Ebrill, M Keen, J P Bodin and V Summers, The Modern VAT (2001) 49; OECD, Consumption Tax Trends (2014) International Monetary Fund 21–22.
58 See Communication from the Commission on measures to change the VAT system to fight fraud, COM(2008) 109 final, 8–9.
59 See also R van Brederode and S Pfeiffer, Combating Carousel Fraud: The General Reverse Charge VAT (IVM, 2015), 146, 153: The general reverse charge system ‘is tailored to developed countries with efficient tax authorities'.
60 For a skeptical assessment, see also A Gebauer, C W Nam and R Parsche, (2007) Journal of Economic Policy Reform 1, 3; W Reiß, in R Seer (ed), Die harmonisierte Umsatzsteuer im nationalen Wirtschaftsverkehr - Widersprüche, Lücken und Harmonisierungsbedarf Umsatzsteuer im Europäischen Binnenmarkt (DStJG 32, 2009) 9, 26.
61 See J Englisch, Conclusions to be drawn - Possible next steps - Directions for future work (2015) World Journal of VAT/GST Law 55, 67.