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A Hitchhiker's Guide to the OECD's International VAT/GST Guidelines

Walter Hellerstein


The OECD’s International VAT/GST Guidelines, which were released in their consolidated form at the OECD’s Global Forum on VAT in Paris in late 2015, are the culmination of nearly two decades of efforts to provide internationally accepted standards for consumption taxation of crossborder trade, particularly trade in services and intangibles. For an American tax journal, however, even one that regularly publishes articles addressed to international taxation, an article on VAT may seem to be an odd choice of a  topic. After all, American exceptionalism continues to inform national tax policy, leaving the United States as the only country in the OECD (and among the overwhelming majority of countries worldwide) without a VAT. Nor does the United States have any other general consumption tax as part of its national tax structure. Moreover, even if one takes the liberty of describing the American subnational retail sales tax (RST) as a consumption tax, there are significant structural differences between the American single-stage RST and the multiple-stage collection process that defines the VAT, thus limiting the relevance of many VAT issues to the American consumption tax regime. Finally, and perhaps most fundamentally, there is the perception in international tax circles that the problems associated with income taxes are intellectually more challenging and thus more worthy of attention than those associated with VATs––problems that are often viewed as involving little more than cash-flow management.

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Published by the University of Florida Press on behalf of the University of Florida Levin College of Law.