Boston University School of Law

Tackling VAT Fraud: Thirteen Ways Forward

Richard T. Ainsworth
Boston University School of Law

Boston University School of Law Working Paper 13-36
(August 13, 2013)


In a May 31, 2006 Communication to the Council, the European Parliament, and the European Economic and Social Committee, the European Commission indicated a need to develop a co-ordinated strategy to improve the fight against fiscal fraud [COM(2006) 254 final].  Although the Communication considers fiscal fraud broadly (VAT, excise duties and direct taxes) the most pressing need seems to be for a VAT strategy that will effectively deal with carousel fraud.

This paper considers thirteen proposals that deal with missing trader intra-community fraud (MTIC):

(1) Common VAT (origin system)
(2) Vanistendael’s foreign tax offices proposal
CVAT (Compensating VAT)
(4) VIVAT  (Variable Integrated VAT)
(5) Dual VAT – HST version
Dual VAT – QST version
PVAT  (Prepaid VAT)
(8) Mittler Model
Reverse charge model – with input tax settlement
Reverse charge model – with joint and several liability
Pay first model – non-cash payment (trust account)
Pay first model – cash payment (tax stamp system)
Digital VAT – D-VAT


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Richard T. Ainsworth Contact Information
LL.M. Tax Program
Boston University School of Law
765 Commonwealth Ave
Boston, MA 02215
Phone: (781) 773-1052


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