Value-added taxation in the EC after 1992: Some applied general equilibrium calculations

Arbeitspapier

This paper examines the quantitative effects of the transitional system of value-added taxation for intra-EC trade after 1992, as recently adopted by the ECOFIN-Council. First, the administration of the current destination principle and the interim solution are described and a mathematical formalization is provided. A short representation of the empirical general equilibrium model featuring seven EC regions and 14 production sectors follows. Finally, the effects of a switch to the transitional system are examined theoretically and by using policy simulations. When decomposing welfare effects, international tax revenue shifts prove to dominate, while substitution effects have relatively little influence on economic welfare. A generous arrangement with regard to long distance shopping, opening tax arbitrage possibilities to final consumers, favours low tax countries at the cost of their EC partners.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge - Serie II ; No. 149

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fehr, Hans ; Rosenberg, Christoph B. ; Wiegard, Wolfgang
• Event: Veröffentlichung
• (who): Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft
• (where): Konstanz
• (when): 1991

Further information

• Handle: http://hdl.handle.net/10419/101721
• Last update: 10.03.2025, 11:41 AM CET