Making a Case for Increased Judicial Globalization in Consumption Tax Law

Abstract

This article makes a case for increased judicial globalization in consumption tax law. The author argues that judicial globalization will assume increased importance once the Organisation for Economic Co-operation and Development (OECD) has released its final International vat/gst Guidelines. It is expected that the guidelines will be adopted worldwide, and will thus have the effect of further homogenizing consumption tax principles around the world. As a result, global judicial dialogue in this field will be increasingly relevant, beneficial, and necessary.

The article sets out to demonstrate, on the one hand, the advantages of having courts around the world engage in a global judicial dialogue in the field of consumption tax law, and, on the other hand, the disadvantages of not engaging in this type of dialogue. To achieve this, the author analyzes the judicial dialogue, or lack thereof, between courts in Canada and Europe. The focus is on judicial dialogue over a heavily litigated legal question: When a transaction consists of more than one supply, how should the courts determine whether all the supplies should be treated as parts of a single taxable supply, or whether each supply should be taxed separately? This question can be of significance to taxpayers, consumers, and domestic tax authorities, and it is specifically addressed by the OECD in the International vat/gst Guidelines.

Through a comparative analysis of cases that have dealt with the single supply question, the author shows the value of engaging in a global judicial dialogue in the field of consumption tax, and concludes that a shift in the attitude of the courts toward engaging in such dialogue should begin sooner rather than later. In this regard, credit must be given to the Canadian courts for their leadership in this emerging global trend.

Keywords: consumption taxes, gst, vat, comparative analysis, tax court of canada, EU, ECJ, UK