Introduction

Several leading forms of VATs in OECD countries can be identified. This chapter describes the main VAT variants. The most influential is the harmonized VAT in the European Union (EU) member states. The EU model has the most extensive case law on VAT issues.

New Zealand departed from the EU model in a number of significant ways, including the expansion of the tax base for its Goods and Services Tax (GST) by limiting exemptions and zero-rating and by taxing many government services. South Africa modeled its VAT after the New Zealand GST but included some of its own unique features. For example, South Africa taxes all fee-based financial services. Australia’s GST is also inspired by the New Zealand model, but there are significant departures.

Japan departed from the EU model by requiring registered firms to calculate periodic tax liability in a different fashion. Under the Japanese Consumption Tax (CT), taxable i rms are not required to issue VAT invoices, which represent a central feature of other VAT regimes.

Canada has a national VAT (known as GST) and several provinces have harmonized VATs. The combined Quebec-national GSTs are administered by Quebec. The combined national and provincial HSTs (the Harmonized Sales Tax) are administered at the national level.