Richard Ainsworth
Adjunct Faculty, Boston University - School of Law, Boston, MA, USA
The one-stop-shop in VAT and RST: common approaches to EU-US consumption tax problems
In March 2004 the European Commission solicited comments on a proposal to simplify value added tax (VAT) obligations through a one-stop scheme.[1] The proposal was modest in scope. It was designed to build upon the success of a similar scheme[2] that dealt with non-EU established persons supplying digital products to non-taxable EU persons.[3] That scheme [...]
VAT Fraud: MTIC & MTEC – The Tradable Services Problem
Tradable services – VoIP termination services, mobile minutes, software as a service (SaaS), or almost any service bought or sold in the “cloud”[1] – are a distinct class of taxable supplies. These service-based supplies both resemble and differ fundamentally from goods. They also differ from services that are consumed-on-purchase (consumed services). Restaurant meals, auto repairs, [...]
Virtual Intermediaries: Consumption Tax Problems In Japan, Europe, And The United States – The Case Of The Virtual Travel Agent
INTRODUCTION Marketplace technology is (inadvertently) chipping away at the effectiveness of consumption taxes – the Japanese Consumption Tax (CT), the European value added tax (VAT), and the American sales tax (ST) are all affected. Frequently a technology-patch or a law change can repair the tax-damage, but sometimes even though a patch or a change is [...]
Use And Enjoyment Of Intangible Services: The Czech Republic’s VAT Derogation
On January 1, 2009 a minor change in the Czech Republic VAT[1] became effective. A use and enjoyment standard was added to modify the sourcing of certain service transactions.[2] Traditional proxy-based rules, derived from Articles 43 and 56(1) of the Recast VAT Directive (RVD),[3] are set aside by this modification when the customer receiving the [...]
EU, UK, French, US, Australian and Japanese Responses To Auditor Independence: The Case Of Non-Audit Tax Services
Auditor independence was a global concern of financial regulators in the 1990’s. Some observers saw this in a positive light, a natural development. Adjusting auditor independence rules was a manifestation of global convergence in corporate governance structures.[1] New rules, especially rules leaning toward a harmonized system were welcome. There was a more sobering view. This [...]
Zappers & Phantom-Ware: A Global Demand For Tax Fraud Technology
There is a demand-market for technology that facilitates tax fraud. By all accounts the providers in this market are working in a growth industry. In the short term this is bad news for those concerned with tax policy[1] and information privacy.[2] In the long term however, the fight against technology-assisted fraud is stimulating the development [...]
Transfer Pricing in VAT/GST vs. Direct Taxation: A Paper On The Topic Of Relations Between Associated Companies
Two caveats open this paper, one dealing with the scope of analysis, the other with the results we are expecting. First, the scope of this inquiry needs to be broadened. Even though the topic asks that we limit ourselves to VAT/GST and direct taxes, in most jurisdictions there are three (not two) spheres of transfer [...]
Quebec’s Module D’enregistrement Des Ventes (MEV): Fighting The Zapper, Phantomware And Tax Fraud With Technology
On January 28, 2008 the Quebec Minister of Revenue, Jean-Marc Fournier, announced[1] that by late 2009 the MRQ will begin testing a device, the module d’enregistrement des ventes (MEV)[2] that is projected to substantially reduce tax fraud in the restaurant sector. By 2010 or 2011 MEVs will be mandatory in all Quebec restaurants, where they [...]
German VAT Compliance – Moving One Step Closer To Automated Third party Solutions
Recent developments in German VAT compliance, notably the imposition of criminal penalties for failing to immediately amend a preliminary return that is known to be in error, are leading businesses to third-party VAT solutions.[1] Germany is not alone in the creative use of criminal enforcement to collect the VAT,[2] but the size and importance of [...]
Will Cutting The Payroll Tax Increase Jobs? (Empirical Evidence From The EU VAT)
Red Ink Rising, the Peterson-Pew Commission on Budget Reform’s report,[1] presents the country with a fiscal/employment dilemma – Congress must act immediately to stem the federal debt, but it must move carefully lest it harm employment in the fragile economy. In short, we must act fast and slow – we must decrease the debt and [...]
Zappers: Tax Fraud, Technology And Terrorist Funding
“Zappers,[1]” or automated sales suppression devices, have brought unheard of efficiencies and economies of scale to a very simple tax fraud – skimming the cash sales that pass through point of sale (POS) systems, network connected electronic cash registers (ECRs). Until recently “the largest criminal tax case in the history of Connecticut,”[2] which also was [...]
Electronic Tax Fraud – Are There “Sales Zappers” In Japan?
Skimming cash receipts is an old fashioned tax fraud; a fraud traditionally associated with small or medium sized enterprises. Large businesses with formalized internal control mechanisms, external accountants, and professional management structures do not normally engaged in skimming.[1] Businesses that skim frequently keep two sets of books (one for the tax man, the other for [...]
