Since 2014
Los Maleficios que Pesan sobre el IVA Provincial: Efecto Magnificación y Paseo de Boletas
Economic Analysis Review
View Archive Info| Field | Value | |
| Title |
Los Maleficios que Pesan sobre el IVA Provincial: Efecto Magnificación y Paseo de Boletas
Los Maleficios que Pesan sobre el IVA Provincial: Efecto Magnificación y Paseo de Boletas |
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| Creator |
Schenone, Osvaldo H.
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| Description |
Two difficulties arise when different jurisdictions have value added taxes at different rates. First, "magnification effect" which consists of an automatic enlargement of the rate differential over and above the one established by the respective legislations. Second, a fraud known as "invoice sightseeing" which takes place when sales in one jurisdiction are declared as sales to a fictitious customer in a lower rate jurisdiction. This paper shows that either both or one of these difficulties will unavoidably appear if the jurisdictions adopt different VAT rates. Under certain arrangements, like the zero rate treatment for interjurisdictional transactions, the magnification effect disappears, but the incentives to perform "invoice sightseeing" are still present. Other arrangements are suggested under which such incentives disappear, but the magnification effect does not. Thus, the policy choice is to select a VAT procedure such that its effects upon economic efficiency and revenue are least damaging.
Two difficulties arise when different jurisdictions have value added taxes at different rates. First, "magnification effect" which consists of an automatic enlargement of the rate differential over and above the one established by the respective legislations. Second, a fraud known as "invoice sightseeing" which takes place when sales in one jurisdiction are declared as sales to a fictitious customer in a lower rate jurisdiction. This paper shows that either both or one of these difficulties will unavoidably appear if the jurisdictions adopt different VAT rates. Under certain arrangements, like the zero rate treatment for interjurisdictional transactions, the magnification effect disappears, but the incentives to perform "invoice sightseeing" are still present. Other arrangements are suggested under which such incentives disappear, but the magnification effect does not. Thus, the policy choice is to select a VAT procedure such that its effects upon economic efficiency and revenue are least damaging. |
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| Publisher |
Universidad Alberto Hurtado - Facultad de Economía y Negocios
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| Contributor |
—
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| Date |
2010-03-07
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
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| Identifier |
http://www.rae-ear.org/index.php/rae/article/view/102
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| Source |
Revista de Análisis Económico - Economic Analysis Review; Vol 15, No 2 (2000); 33-47
Revista de Análisis Económico – Economic Analysis Review; Vol 15, No 2 (2000); 33-47 0718-8870 0716-5927 |
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| Language |
spa
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| Relation |
http://www.rae-ear.org/index.php/rae/article/view/102/196
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