A Hitchhiker’s Guide to the OECD’s International VAT/GST Guidelines

The paper was presented at the 11th annual International Tax Symposium at the University of Florida Levin College of Law, on October 30, 2015.

18 Florida Tax Review, 589 (2016).

UGA Legal Studies Research Paper No. 2015-31

Dean Rusk International Center Research Paper No. 2015-01

50 Pages Posted: 14 Oct 2015 Last revised: 6 Apr 2016

Walter Hellerstein

University of Georgia School of Law

Date Written: October 14, 2015

Abstract

The OECD’s International VAT/GST Guidelines, which were released in their consolidated form at the OECD’s Global Forum on VAT in Paris in late 2015, are the culmination of nearly two decades of efforts to provide internationally accepted standards for consumption taxation of cross-border trade, particularly trade in services and intangibles. This article provides a roadmap to the Guidelines, especially for readers who may be unfamiliar with consumption tax principles, in general, or VATs in particular. Part II of the article provides the background to the Guidelines, describing the basic features of a VAT, the problems with which the Guidelines are concerned, and a brief history of the OECD’s efforts to address these problems. Part III discusses the Guidelines’ neutrality principles. Part IV discusses the general rules applicable to business-to-business (B2B) transactions. Part V discusses the general rules applicable to business-to-consumer (B2C) transactions. Part VI discusses specific rules for particular types of supplies. Part VII discusses the Guidelines’ recommendations designed to support a consistent interpretation of the Guidelines, including the use of mechanisms for mutual cooperation and exchange of information and other arrangements allowing tax administrations to work together. Part VIII concludes.

Keywords: value added tax, goods and services tax, tax law, taxation, business-to-business transaction, business-to-consumer transactions, destination principle, international trade, services, intangibles, Organisation for Economic Co-operation and Development, direct use, direct delivery, recharge method

JEL Classification: F19, H29, K34, M49

Suggested Citation

Hellerstein, Walter, A Hitchhiker’s Guide to the OECD’s International VAT/GST Guidelines (October 14, 2015). The paper was presented at the 11th annual International Tax Symposium at the University of Florida Levin College of Law, on October 30, 2015.; 18 Florida Tax Review, 589 (2016).; UGA Legal Studies Research Paper No. 2015-31; Dean Rusk International Center Research Paper No. 2015-01. Available at SSRN: https://ssrn.com/abstract=2674117

Walter Hellerstein (Contact Author)

University of Georgia School of Law ( email )

209 Hirsch Hall
Athens, GA 30602
(706) 542-5175 (Phone)
(706) 542-5556 (Fax)

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