VAT/GST in a Global Digital Economy: Looking Ahead - Potential Solutions and the Framework to Make Them Work

24 Pages Posted: 27 Apr 2016 Last revised: 29 Apr 2016

See all articles by Rebecca Millar

Rebecca Millar

The University of Sydney Law School

Date Written: October 6, 2014


This working paper gives a broad-sweep consideration to the future of VAT in a digital economy, focussing on four broad, interrelated questions: does anything need to be done, and if yes, who should do it, what should be done, and how should it be done? Noting the historical development of the OECD work on cross-border VAT rules for digital and other services – and the expansion and increased attention to that work as a result of its inclusion in the BEPS process – the author answers the first question in the affirmative and then turns to the remaining questions. A strong preference is expressed for continuing the existing multifaceted, multipronged, diffuse approach to improving and coordinating the collection of VAT in a cross-border context. After rejecting the notion of a VAT multilateral tax instrument, along the lines of the OECD Model Tax Convention, the paper concludes with a more small-picture list of specific things that could be done, and/or which currently are being done in some countries, and which could be elevated to the status of international best practice and widely adopted by countries operating a fully-fledged VAT.

Though written in 2014, prior to the release of the final version of the OECD International VAT/GST Guidelines and recent or proposed extensions of consumption tax to inbound digital services in Japan, Australia, New Zealand, Korea, and other countries, the paper remains highly topical and relevant to the current discourse on cross-border rules for VAT and GST laws.

A version of this paper was published as Chapter 5 in Michael Lang and Ine Lejeune (eds.), VAT/GST in a Global Digital Economy (2015 Kluwer Law International Alphen aan den Rijn:), pp. 173-196.

Keywords: VAT, GST, consumption tax, BEPS, international tax, International VAT/GST Guidelines, digital economy, tax, value-added tax, goods and services tax, tax on inbound services

JEL Classification: K10, K30, K34

Suggested Citation

Millar, Rebecca Mescal, VAT/GST in a Global Digital Economy: Looking Ahead - Potential Solutions and the Framework to Make Them Work (October 6, 2014). Sydney Law School Research Paper No. 16/30. Available at SSRN:

Rebecca Mescal Millar (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics