Consumption tax trends 2016 : VAT/GST and excise rates, trends and policy issues.

194 Pages·2016·2.735 MB·English

by  OECD

Consumption Tax Trends 2016
VAT/GST And exCiSe rATeS, TrendS And poliCy iSSueS
Consumption Tax Trends
Contents
Chapter 1. Taxing consumption
2016
Chapter 2. Value added taxes: Rates and structure
Chapter 3. Measuring performance of VAT
VAT/GST And exCiSe rATeS,
Chapter 4. Selected excise duties in OECD countries
TrendS And poliCy iSSueS
Chapter 5. Taxing vehicles
Annex A. Countries with VAT
Annex B. Statement of outcomes on the OECD International VAT/GST Guidelines
Annex C. Exchanges rates
Annex D. Cigarettes – Most sold brands (MSB) in OECD countries
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iSbn 978-92-64-26404-5
23 2016 35 1 p

Consumption Tax Trends
2016
VAT/GST AND EXCISE RATES,
TRENDS AND POLICY ISSUES
ThisworkispublishedundertheresponsibilityoftheSecretary-GeneraloftheOECD.The
opinionsexpressedandargumentsemployedhereindonotnecessarilyreflecttheofficial
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Pleasecitethispublicationas:
OECD (2016), ConsumptionTaxTrends 2016:VAT/GST and excise rates, trends and policy issues, OECD
Publishing,Paris.
http://dx.doi.org/10.1787/cct-2016-en
ISBN978-92-64-26404-5(print)
ISBN978-92-64-26405-2(PDF)
Series:ConsumptionTaxTrends
ISSN1562-8752(print)
ISSN1999-0979(online)
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FOREWORD
Foreword
T
hisistheeleventheditionofConsumptionTaxTrends,abiennialOECDpublication.Itpresents
cross-country comparative data relative to consumption taxes in OECD member countries, as at
1January2016. Tables using data from the National Accounts and data on tax revenue from
RevenueStatistics1965-2015areupdateduptoandincluding2014.Pricelevelsforfueloilsare
updatedasat4thQuarter2015fromEnergyPricesandTaxes–QuarterlyStatisticsissuedby
the International Energy Agency. The country data for the report have, for the most part, been
providedbydelegatestoWorkingPartyNo.9.Theexchangeratesusedtoconvertnationalcurrencies
into US dollars (USD) are average market rates for2015 taken from the OECD Monetary and
Financial Statistics, except for Tables1.A1.10 (Chapter1), and 2.A2.3 (Chapter2) where the
PurchasePowerParity(PPP)ratesareusedastheyprovideforabettercomparisonofthevalueof
VATreliefthresholds(PPPratesforGDP2015areextractedfromtheOECDStatisticsDatabase).
This publication illustrates the evolution of consumption taxes as instruments for raising tax
revenue. It identifies and documents the large number of differences that exist in respect of the
consumption tax base, rates and implementation rules while highlighting the features underlying
their development. It looks, in particular, at developments in the Value Added Tax/Goods and
Services Tax (VAT/GST) area (referred to as “VAT” in this publication). It notably presents an
updatedestimateoftheVATRevenueRatio(VRR)forOECDcountries,providinganindicatorofthe
loss of VAT revenue as a consequence of exemptions and reduced rates, fraud, evasion and tax
planning.ItnotesthecompletionoftheOECDInternationalVAT/GSTGuidelinesanditsworldwide
acceptanceastheemerginginternationalstandardfortheapplicationofVATtocross-bordertradein
services and intangibles. Chapter1 summarises trends in consumption taxes and their main
features.Itshowstheevolutionofconsumptiontaxrevenuesbetween1965and2014andlooksin
somemoredetailattheapplicationofVATtointernationaltrade,moreparticularlyatthechallenges
of applying VAT to cross-border trade in services and intangibles and at the OECD International
VAT/GST Guidelines. It also considers the recent evolutions concerning VAT fraud. Chapter2
describes the key features of VAT regimes in OECDcountries, i.e.tax rates, exemptions, specific
restrictions to input tax credit, registration and collection thresholds,VAT relief arrangements for
goods imported by final consumers and special tax collection methods. It is complemented with a
technicalnoteontherationaleandimpactofreducedVATrates.Chapter3describeshowtheVAT
Revenue Ratio (VRR) provides an indicator of the effect of exemptions, reduced rates and non-
complianceongovernmentrevenuesandexplainshowitiscalculatedandshouldbeinterpreted.It
iscomplementedwithtechnicalnotesonmeasurementissues.Chapter4describesthemainfeatures
ofexcisedutiesandtheirimpactonrevenue,customerbehaviourandmarkets.Itshowsthedetailed
excise tax rates on beer, wine, alcoholic beverages, tobacco, and mineral oil products in
OECDcountries.Italsoprovides,forthefirsttime,anestimateofthetotaltaxburdeninapackof
cigarettesinOECDcountries.Chapter5describesthemainfeaturesofvehicletaxesandtheirusefor
CONSUMPTIONTAXTRENDS2016©OECD2016 3
FOREWORD
influencingcustomerbehaviour.Itprovidesdetailedinformationontaxesonsaleandregistrationof
vehiclesandrecurrenttaxes.
ThispublicationwaspreparedundertheauspicesoftheWorkingPartyN°9onConsumption
Taxes,oftheCommitteeonFiscalAffairs.ItwaswrittenbyStéphaneBuydensoftheOECDCentre
forTaxPolicyandAdministration(CTPA).
4 CONSUMPTIONTAXTRENDS2016©OECD2016
TABLEOFCONTENTS
Table of contents
Acknowledgements......................................................... 9
Executivesummary......................................................... 11
Chapter1.Taxingconsumption............................................... 13
1.1. Introduction........................................................ 14
1.2. Classificationofconsumptiontaxes ................................... 15
1.3. Evolutionofconsumptiontaxrevenues ................................ 16
1.4. SpreadofVAT....................................................... 19
1.5. ThemainfeaturesofVATdesign ...................................... 19
1.6. MaindesignfeaturesofRetailSalesTaxes.............................. 22
1.7. Maincharacteristicsofconsumptiontaxesonspecificgoodsandservices .. 23
1.8. VATandinternationaltrade–Thedestinationprinciple .................. 24
1.9. TacklingtheVATcompliancegap...................................... 33
Notes.................................................................. 36
References ............................................................. 36
Annex1.A1.Dataontaxingconsumption................................... 38
Chapter2.Valueaddedtaxes:Ratesandstructure............................... 67
2.1. Introduction........................................................ 68
2.2. Theevolutionofstandardratesandreducedrates....................... 68
2.3. Exemptions ........................................................ 71
2.4. RestrictionstotherighttodeductVATonspecificinputs................. 73
2.5. Registrationandcollectionthresholds ................................. 74
2.6. Applicationofmarginschemes ....................................... 76
2.7. Technicalnote–RationaleandimpactofreducedVATrates............... 76
References ............................................................. 80
Annex2.A2.Dataonvatratesandstructures................................ 82
Chapter3.MeasuringperformanceofVAT...................................... 101
3.1. Introduction........................................................ 102
3.2. WhatdoestheVRRmeasureandhowisitcalculated?.................... 102
3.3. TheVRRestimatesforOECDcountries................................. 104
3.4. HowtointerprettheVRRestimates?................................... 106
3.5. Technicalnotes..................................................... 109
References ............................................................. 116
Annex3.A3.VATRevenueRatio............................................ 117
Chapter4.SelectedexcisedutiesinOECDcountries............................. 119
4.1. Introduction........................................................ 120
CONSUMPTIONTAXTRENDS2016©OECD2016 5
TABLEOFCONTENTS
4.2. Keycharacteristicsandrevenuetrends................................. 120
4.3. Alcoholicbeverages ................................................. 123
4.4. Tobaccoproducts ................................................... 124
4.5. Mineraloilproducts................................................. 126
4.6. Impactoncross-bordertrade ......................................... 127
4.7. Distributionalimpactofexcise........................................ 128
Notes.................................................................. 128
References ............................................................. 128
Annex4.A4.Dataonexciserates .......................................... 130
Chapter5.Taxingvehicles.................................................... 157
5.1. Introduction........................................................ 158
5.2. Cartaxationandpollutingemissions .................................. 159
5.3. Taxesonpurchaseandregistrationofmotorvehicles .................... 160
5.4. Periodictaxesinconnectionwithownershiporuseofmotorvehicles...... 161
References ............................................................. 161
Annex5.A5.Dataoncartaxation .......................................... 162
AnnexA.CountrieswithVAT................................................. 181
AnnexB.StatementofoutcomesOntheOECDInternationalVAT/GSTGuidelines... 185
AnnexC.Exchangesrates .................................................... 187
AnnexD.Cigarettes–Mostsoldbrands(MSB)inOECDCountries ................. 189
Tables
1.A1.1. Consumptiontaxes(5100)aspercentageofGDP ......................... 39
1.A1.2. Consumptiontaxes(5100)aspercentageoftotaltaxation ................. 40
1.A1.3. Taxesongeneralconsumption(5110)aspercentageofGDP................ 41
1.A1.4. Taxesongeneralconsumption(5110)aspercentageoftotaltaxation ....... 42
1.A1.5. Taxesonspecificgoodsandservices(5120)aspercentageofGDP........... 43
1.A1.6. Taxesonspecificgoodsandservices(5120)aspercentageoftotaltaxation .. 44
1.A1.7. Valueaddedtaxes(5111)aspercentageofGDP........................... 45
1.A1.8. Valueaddedtaxes(5111)aspercentageoftotaltaxation .................. 46
1.A1.9. TaxstructuresintheOECDarea ....................................... 47
1.A1.10.VATreliefforlowvalueimports........................................ 48
1.A1.11.MechanismsforcollectingVAToncross-bordersuppliesofservicesand
intangiblesfromnon-residentsuppliers(“inboundsupplies”).............. 50
1.A1.12.Applicationofdomesticreversechargeandsplitpaymentmechanisms..... 53
1.A1.13.Import/exportofgoodsbyindividualtravellers .......................... 59
2.A2.1. VATrates........................................................... 83
2.A2.2. ApplicationoflowerVATrates......................................... 85
2.A2.3. AnnualturnoverconcessionsforVATregistrationandcollection
(domesticbusinesses)................................................ 89
2.A2.4. VATExemptions..................................................... 92
2.A2.5. RestrictionstotherighttodeductVATonspecificinputs.................. 96
2.A2.6. Usageofmarginschemes............................................. 99
3.A3.1. VATRevenueRatio(VRR).............................................. 118
4.A4.1. Taxationofbeer ..................................................... 131
6 CONSUMPTIONTAXTRENDS2016©OECD2016
TABLEOFCONTENTS
4.A4.2. Taxationofwine..................................................... 136
4.A4.3. Taxationofalcoholicbeverages........................................ 139
4.A4.4. Taxationoftobacco .................................................. 142
4.A4.5. Taxburdenasashareoftotalpriceforcigarettes ........................ 145
4.A4.6. Taxationofpremiumunleaded(94-96RON)gasoline(perlitre),2015 ....... 147
4.A4.7. Taxationofautomotivediesel(perlitre),2015............................ 149
4.A4.8. Taxationoflightfueloilforhouseholds(perlitre),2015................... 152
4.A4.9. Excises(5121)aspercentageoftotaltaxation............................ 155
5.A5.1. Taxesonsaleandregistrationofmotorvehicles ......................... 163
5.A5.2. Taxesonownershiporuseofmotorvehicles............................ 173
Figures
1.1. Averagetaxrevenueasapercentageoftotaltaxation,bycategoryoftax2014 16
1.2. ShareofVATasapercentageoftotaltaxation2014....................... 17
1.3. Shareofconsumptiontaxesaspercentageoftotaltaxation1966-2014...... 18
1.4. Evolutionofthetaxmix1965-2014..................................... 18
1.5. NumberofcountrieshavingimplementedaVAT1960-2016................ 19
2.1. EvolutionofstandardVATrates–OECDaverage1976-2016 ................ 69
2.2. StandardratesofVATinOECDcountries,2016........................... 70
3.1. VATRevenueRatioinOECDcountries2014.............................. 105
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