The Long Shadow of the European VAT, Exemplified by the Dutch Experience

Bettendorf, Léon; Cnossen, Sijbren

doi:10.1628/001522115x14180276055734

Cited by 14 publications

(18 citation statements)

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“…Similar results have been found for other EU Member States (Institute for Fiscal Studies 2011). Bettendorf and Cnossen (2015) also find that higher-income groups spend relatively as much on goods and services subject to the reduced rate as lower-income groups. This implies that they spend more in euro terms.…”

Section: Reducing Regressivitymentioning

confidence: 75%

“…In an alternative scenario, the elimination of the reduced rate is combined with a reduction of the standard rate by 5%-points for the UK and 3%-points for Belgium, so that VAT yields stay the same. This results in a welfare gain per household of e0.95 per week in the UK 32 and 30 Much of the following draws on Bettendorf and Cnossen (2015). 31 For the classic analysis, see Harberger (1964).…”

Section: Misallocation Of Resourcesmentioning

confidence: 99%

“…Nonetheless, reduced rates are shown to be a very poor tool for targeting support to poor households. 35 Further, in the case of an individual country, the Netherlands, Bettendorf and Cnossen (2015) evaluate the effectiveness of reduced VAT rates at redistributing income toward poor households on the basis of the spending patterns of individual households over various income deciles in the Netherlands as reported in a 2004 household budget survey. After adjusting incomes and expenditures for the size and composition of households, they express differences in VAT burdens between lowerand higher-income groups through what is called the effective VAT rate-that is, total VAT payments of a normalized household as a percentage of disposable income (excluding income tax and VAT).…”

Section: Reducing Regressivitymentioning

confidence: 99%

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VAT and agriculture: lessons from Europe

Cnossen

2017

Int Tax Public Finance

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Little has been written about the treatment of agriculture under the value added tax (VAT). This article attempts to fill the void by surveying and evaluating the situation in the Member States of the European Union (EU) and some other countries. Farmers are often exempted from VAT for administrative and political reasons. But this means that the VAT on their inputs cannot be 'washed out' through the tax deduction/credit mechanism. It then has to be borne by the farmers themselves or becomes an indeterminate and capricious element in consumer prices. To compensate farmers for the uncompensated VAT on inputs, the EU has devised a flat-rate scheme that permits them to charge a presumptive rate (approximately equal to the effective VAT rate on sector-wide inputs) on their sales to taxable agro-processing firms which, in turn, are permitted to take a deduction for this flat-rate addition from the VAT on their sales. Obviously, the flat-rate scheme is an arbitrary way of trying to achieve equal treatment between exempt and taxable farmers and between exempt farm products and other taxable goods and services. Full taxation, subject to the general threshold, appears to be the preferred choice.

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Section: Reducing Regressivitymentioning

confidence: 75%

Section: Misallocation Of Resourcesmentioning

confidence: 99%

Section: Reducing Regressivitymentioning

confidence: 99%

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VAT and agriculture: lessons from Europe

Cnossen

2017

Int Tax Public Finance

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“…In the taxation of consumption, it is far more important to consider expenses related to consumption, which are more stable from the viewpoint of a life cycle. Bettendorf and Cnossen (2014) proved on the basis of data for the Netherlands that those with a higher income have 1.8 times greater benefits from a lower tax rate than those who are poorer (in terms of EUR). On the other hand, the loss of profit in the budget is very high due to the reduced rate and does not outweigh the redistribution effect.…”

Section: Analysis Of Selected Statements Of Slovenian Professionals Imentioning

confidence: 99%

Analysis of the Relationship of Professionals towards the Vertical Equity of the Slovenian Tax System and Its Comparison with Croatia, Bosnia and Herzegovina and the USA

Klopčič¹,

Klun

2018

CEPAR

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Vertical equity states that taxpayers whose positions are not the same should be treated differently while taking into consideration all the relevant characteristics. The main purpose of using the vertical equity principle is to require the redistribution of income in a way that reduces the income inequality of the society. The presented research aims to check the opinion of Slovenian tax system professionals on the principle of vertical equity. Slovenian results have been compared to a similar analysis carried out in Croatia, and partly with survey results from Bosnia and Herzegovina and the United States of America. The results show that the professional public agrees with the principle of vertical equity in the implementation of tax systems. All of the compared countries are similarly favourable towards vertical equity. However, this is also affected by the current tax arrangements of the individual countries.

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“…In practice, the implicit VAT burden on government and private consumption have been shown to be similar, although a larger share of government wages in government consumption, ceteris paribus, results in a lower effective VAT rate on total government consumption. Bettendorf and Cnossen (2015) calculate the effective VAT rate, i.e., the implicit VAT burden, for each subcomponent of the VAT base of the Netherlands for the year 2010. They find that the effective VAT rate on government consumption (exclusive of education) is only slightly lower than the effective VAT rate on private consumption, at 10.0% compared to 10.7% (Bettendorf and Cnossen, 2015 [10]).…”

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confidence: 99%

What drives consumption tax revenues?

Hannah¹,

Harding²

2020

OECD Taxation Working Papers

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This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

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The Long Shadow of the European VAT, Exemplified by the Dutch Experience

Cited by 14 publications

References 0 publications

VAT and agriculture: lessons from Europe

VAT and agriculture: lessons from Europe

Analysis of the Relationship of Professionals towards the Vertical Equity of the Slovenian Tax System and Its Comparison with Croatia, Bosnia and Herzegovina and the USA

What drives consumption tax revenues?

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