Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
VAT seems to be used more as an excuse to enforce business record keeping than as a tax.

More generously, it can also help with cash flow because every quarter businesses get a short-term loan of x% of their quarterly turnover.

If the aim was revenue collection from consumers, the pay-back/pay-forward system would be unnecessary. And because cross-border pay-back/pay-forward gets complicated, VAT isn't even collected for B2B transactions in the EU.

E.g. I sold a domain name to a Dutch company at the start of the year, and although VAT was nominally charged and recovered, in practice there was one line of paperwork and no actual cash.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Dec 18th, 2010 at 04:05:13 PM EST
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