valued-added-tax-增值税-—外文翻译-学位论文.doc

Value added tax
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Abstract
A value added tax(VAT)is a form of consumption tax．It is a tax on the”value added”to a product or material，from an accounting view, at each stage of its manufacture or distribution．The”value added”to a product by a business is the sale price charged to its customer，minus the cost of materials and other taxable inputs．A VAT is like a sales tax in that ultimately only the end consumer is taxed．It differs from the sales tax in that，with the latter，the tax is collected and remitted to the government only once．at the point of purchase by the end consumer．With the VAT, collections，remittances to the government，and credits for taxes already paid occur each time a business in the supply chain purchases products from another business. The reason businesses end up paying no tax is that at the time they sell the product，they receive a credit for all the tax they have paid to suppliers．
Personal end-consumers of products and services cannot recover VAT on purchases，but businesses are able to recover VAT(input tax)on the products and services that they buy in order to produce further goods or services that will be sold to yet another business in the supply chain or directly to a final consumer．In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products，and most of the cost of collecting the tax is borne by business，rather than by the state．Value Added Taxes were introduced in part because they create stronger incentives to collect than a sales tax does．Both types of consumption tax create an incentive by end consumers to avoid or evade the tax．But the sales tax offers the buyer a mechanism to avoid or evade the tax--persuade the seller that he is not really an end consumer，and therefore the seller is not legally required to collect it．The burden of determining whether the buyer’S motivation is to consume or re-sell is on the seller．but the seller has no direct economic incentive to the seller to collect it．The VAT approach gives sellers a direct financial stake in collecting the tax，and eliminates the problematic decision by the seller about whether the buyer is or is not an end consumer．
Chapter I Comparison with a sales tax
Value added tax(VAT)avoids the cascade effect of sales tax by taxing only the value added at each stage of production．For this reason，throughout the world，VAT has been gaining favor over traditional sales taxes．In principle，VAT applies to all provisions of goods and services．VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government．If however, the purchaser is not an end user，but the goods or services purchased are costs to its business, the tax it has paid for such purchases can be deducted from the tax it charges to its customers．The government only receives the difference；in other words，it is paid tax on the gross margin of each transaction，by each participant in the sales chain．
Sales tax is normally charged on end users(consumers)．The VAT mechanism means that the end—user tax is the same as it would be with a sales tax．The main difference is the extra accounting required by those in the middle of the supply chain； this disadvantage of VAT is balanced by application of the same tax to each member of the production chain regardless of its position in it and the position of its customers, reducing the effort required to check and certify their status．When the VAT system has few, if any, exemptions such as with GST in New Zealand，payment of VAT is even simpler.
A general economic idea is that if sales taxes exceed 1 0％，people start engaging in widespread tax evading activity(1ike buying over the Internet，pretending to be a business，buying at wholesale，buying products through an employer etc. On the other hand．total VAT rates can rise above 1 0％without widespread evasion because of the novel collection mechanism．However，because of its particular mechanism of collection，VAT becomes quite easily the target of specific frauds like carousel fraud, which can be very expensive in terms of loss of tax incomes for states.
1.1 Principle of VAT
The standard way to implement a VAT involves assuming a business owes some percentage on the price of the product minus all taxes previously paid on the good. If VAT rates were 10％，an orange juice maker would pay 10％of the￡5 per litre price (￡0.50)minus taxes previously paid by the orange farmer(maybe￡0.20)．In this example，the orange juice maker would have a ￡0.30 tax liability. Each business has a strong incentive for its suppliers to pay their taxes，allowing VAT rates to be higher with less tax evasion than a retail sales tax．Behind this simple principle are the variations in its implementations，as discussed in the next section．
1.2 Basis for VATs
By the method of collection. VAT can be accounts-based or invoice-based. Under the invoice method of collection, each seller charges VAT rate on his output and passes the buyer a special invoice that indicates the amount of tax charged. Buyers who are subject to VAT on their own sales(output tax)，consider the tax on the purchase invoices as input tax and can deduct the sum from their own VAT liability. The difference between output tax and input tax is paid to the government (or a refund is claimed，in the case of negative liability). Under the accounts based method，no such specific invoices are used．Instead，the tax is calculated on the value added, measured as a difference between revenues and allowable purchases. Most countries today use the invoice method, the only exception being Japan, which uses the accounts method.
Chapter II Criticisms
The “value-added tax” has been criticized as the burden of it relies on personal end-consumers of products. Some critics consider it to be a regressive tax, meaning the poor pay more, as a percentage of their income, than the rich. Defenders argue that excising taxation through income is an arbitrary standard，and that the value-added tax is in fact a proportional tax in that people with higher income pay more at the same rate that they consume more. The effective progressiveness or regressiveness of a VAT system can also be affected when different classes of goods are taxed at different rates. To maintain the progressive nature of total taxes on individuals, countries implementing VAT have reduced income tax on lower income-earners, as well as instituted direct transfer payments to lower-income groups, resulting in lower tax burdens on the poor.
Revenues from a value added tax are frequently lower than expected because they are difficult and costly to administer and collect．In many countries, however, where collection of personal income taxes and corporate profit taxes has been historically weak, VAT collection has been more successful than other types of taxes. VAT has become more important in many jurisdictions as tariff levels have fallen worldwide due to trade liberalization. as VAT has essentially replaced lost tariff revenues. Whether the costs and distortions of value added taxes are lower than the economic inefficiencies and enforcement issues (e.g. smuggling) from high import tariffs is debated, but theory suggests value added taxes are far more efficient.
Certain industries(small．scale services，for example)tend to have more VAT avoidance, particularly where cash transactions predominate，and VAT may be criticized for encouraging this. From the perspective of government, however, VAT may be preferable because it captures at least some of the value-added, For example, a carpenter may offer to provide services for cash (i.e. without a receipt, and without VAT)to a homeowner, who usually cannot claim input VAT back. The homeowner will hence bear lower costs and the carpenter may be able to avoid other taxes (profit or payroll taxes). The government, however, may still receive VAT for various other inputs(1umber, paint, gasoline, tools, etc.) sold to the carpenter，who would be unable to reclaim the VAT on these inputs (unless of course the carpenter also has at 1east some jobs done with receipt, and claims all purchased inputs to go to those jobs). While the total tax receipts may be lower compared to full compliance, it may not be lower than under other feasible taxation systems.
Chapter III VAT systems
3.1 European Union
The European Union Value Added Tax(EU VAT)is a value added tax encompassing member states in the European Union Value Added Tax Area. Joining in this is compulsory for member states of the European Union. As a consumption tax, the EU VAT taxes the consumption of goods and services in the EU VAT area. The EU VAT’s key issue asks where the supply and consumption occurs thereby determining which member state will collect the VAT and which VAT rate will be charged.
Each Member State’s national VAT legislation must comply with the provisions 0f EU VAT law as set out in Directive 2006/112/EC. This Directive sets out the basic framework for EU VAT, but does allow Member States some degree of flexibility in implementation of VAT legislation. For example different rates of VAT are allowed in different EU member states. However Directive 2006/112requires Member states to have a minimum standard rate of VAT of 15％and one or two reduced rates not to be below 5％. Some Member States have a 0％VAT rate on certain supplies-these Member States would have agreed this as part of their EU Accession Treaty(for example, newspapers and certain magazines in Belgium). The current maximum rate in operation in the EU is 25％, though member states are free to set higher rates.
VAT that is charged by a business and paid by its customers is known as ”output VAT” (that is，VAT on its output supplies). VAT that is paid by a business to other businesses on the supplies that it receives is known as ”input VAT”(that is, VAT on its input supplies). A business is generally able to recover input VAT to the extent that the input VAT is attributable to(that is, used to make)its taxable outputs. Input VAT is recovered by setting it against the output VAT for which the business is required to account to the government, or, if there is an excess, by claiming a repayment from the government.
The VAT Directive (prior to 1 January 2007 referred to as the Sixth VAT Directive) requires certain goods and services to be exempt from VAT (for example, postal services, medical care, lending, insurance, betting), and certain other goods and services to be exempt from VAT but subject to the ability of an EU member state to opt to charge VAT on those supplies (such as land and certain financial services). Input VAT that is attributable to exempt supplies is not recoverable，although a business Can increase its prices SO the customer effectively bears the cost of the ’sticking’ VAT (the effective rate will be lower than the headline rate and depend on the balance between previously taxed input and labor at the exempt stage).
3.2 The Nordic countries
In Denmark，VAT is generally applied at one rate, and with few exceptions is not split into two or more rates as in other countries (e.g. Germany), where reduced rates apply to essential goods such as foodstuffs．The current standard rate of VAT in Denmark is 25%. That makes Denmark one of the countries with the highest value added tax, alongside Norway and Sweden. A number of services has reduced VAT, for instance public transportation of private persons, health care services, publishing newspapers, rent of premises (the lessor can, though, voluntarily register as VAT payer, except for residential premises), and travel agency operations.
In Finland，the standard rate of VAT is 23%, along with all other VAT rates, excluding the zero rate. In addition，two reduced rates are in use:12%(reduced in October 2009 from 17% for non-restaurant food, from July 2010 will encompass restaurant food also), which is applied on food and animal feed, and 8%, which is applied on passenger transportation services, cinema performances, physical exercise services, books, pharmaceuticals, entrance fees to commercial cultural and entertainment events and facilities. Supplies of some goods and services are exempt under the conditions defined in the Finnish VAT Act: hospital and medical care; social welfare services; educational. financial and insurance services; lotteries and money games; transactions concerning bank notes and coins used as legal tender; real property including building land; certain transactions carried out by blind persons and interpretation services for deaf persons. The seller of these tax-exempt services or goods is not subject to VAT and does not pay tax on sales. Such sellers therefore may not deduct VAT included in the purchase prices of his inputs.
In Sweden, VAT is split into three levels; 25% for most goods and services including restaurants bills, 12% for foods (incl. bring home from restaurants) and hotel stays (but breakfast at 25%) and 6% for printed matter, cultural services, and transport of private persons. Some services are not taxable for example education of children and adults if public utility, and health and dental care, but education is taxable at 25% in case of courses for adults at a private school. Dance events (for the guests) have 25%, concerts and stage shows have 6%, and some types of cultural events have 0%.
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