Worldwide Versus Territorial Tax Systems: Comparison of Value Added Tax and Income Tax

Wayne State University Law School Research Paper No. 09-27

VALUE ADDED TAX AND DIRECT TAXATION, Michael Lang, Peter Melz, Eleonor Kristoffersson, eds., IBFD, December 2009

15 Pages Posted: 10 Dec 2009

See all articles by Alan S. Schenk

Alan S. Schenk

Wayne State University Law School

Date Written: December 8, 2009

Abstract

The following paper was presented at a conference on Value Added Tax and Direct Taxation – Similarities and Differences: International Network for Tax Research (INTR) Conference, March 26-28, 2009, Organized by the Institute for Austrian and International Tax Law, WU Vienna and the Institute for VAT Research at Stockholm University, and was published by the IBFD.

In designing an income tax or a VAT, a country generally must decide how broadly, geographically, it wants to assert its tax authority. The country may choose to impose its income tax or VAT under a worldwide or territorial principle. There are many countries with worldwide and territorial income taxes. There are many countries that impose territorial VAT systems, but relatively few impose a worldwide VAT system. To date, the literature fails to recognize some existing VAT systems as worldwide systems. In this paper, I suggest that at least the New Zealand and South Africa VATs can be analyzed as worldwide VAT systems. I compare these systems with the commonly used territorial VATs. This paper also raises the question of whether differences in the design of a VAT as a territorial or worldwide VAT represent only differences in form or differences in substance.

Suggested Citation

Schenk, Alan S., Worldwide Versus Territorial Tax Systems: Comparison of Value Added Tax and Income Tax (December 8, 2009). Wayne State University Law School Research Paper No. 09-27, VALUE ADDED TAX AND DIRECT TAXATION, Michael Lang, Peter Melz, Eleonor Kristoffersson, eds., IBFD, December 2009 , Available at SSRN: https://ssrn.com/abstract=1520711

Alan S. Schenk (Contact Author)

Wayne State University Law School ( email )

471 Palmer
Detroit, MI 48202
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
727
Abstract Views
3,622
Rank
65,031
PlumX Metrics