Indirect taxation in an integrated Europe

TY - JOUR

T1 - Indirect taxation in an integrated Europe

AU - Genser, Bernd

AU - Haufler, Andreas

AU - Sørensen, Peter Birch

PY - 1995

Y1 - 1995

N2 - The paper discusses the main arguments for destination- versus origin-based commodity taxation in the European Community's Internal Market. Destination-based solutions distort commodity trade in the Community because cross-border purchases by final consumers can only be taxed in the origin country. On the other hand, an origin-based general consumption tax is neutral in a European context and it can be combined with destination-based taxation in third countries in a non-distortionary way. Furthermore, it is shown that the introduction of capital mobility does not affect the neutrality of an origin-based consumption tax. Finally, the paper addresses the administrative and political implications of a switch to the origin principle in the European Community

AB - The paper discusses the main arguments for destination- versus origin-based commodity taxation in the European Community's Internal Market. Destination-based solutions distort commodity trade in the Community because cross-border purchases by final consumers can only be taxed in the origin country. On the other hand, an origin-based general consumption tax is neutral in a European context and it can be combined with destination-based taxation in third countries in a non-distortionary way. Furthermore, it is shown that the introduction of capital mobility does not affect the neutrality of an origin-based consumption tax. Finally, the paper addresses the administrative and political implications of a switch to the origin principle in the European Community

M3 - Journal article

SN - 1225-651X

VL - 10

SP - 178

EP - 205

JO - Journal of Economic Integration

JF - Journal of Economic Integration

IS - 2

ER -