Consumption Tax Topics that OECD will probably address - 2
Distortion caused by using Tax inclusive/exclusive prices
- VAT countries have to display VAT inclusive prices, GST countries don't
- if you're not sure the "consumer" is "abroad" then VAT countries charge VAT whereas GST countries do not
Tax Collection
- Current legislation doesn't allow one Tax Authority to have jurisdiction over another, e.g. the UK's Inland Revenue can't require a US merchant to collect VAT or vice versa
- so who should pay the tax due ... the buyer or the seller?
- usually the seller collects and if they can't the buyer "should"
- can tax "clearing houses" help where one country collects on behalf of another
Tax Enforcement
- looking at using the Internet to help tax authorities execute existing powers of access to tax records relating to Consumption or Direct taxes