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On the Evolving VAT Concept of Fixed Establishment

On the Evolving VAT Concept of Fixed Establishment ec Editorial TAX On the Evolving VAT Concept of Fixed REVIEW Establishment 2021–5&6 Rita de la Feria The relevance of the concept of fixed establishment (FE) required to determine where consumption has taken for the EU VAT system can hardly be over-stated. place, and thus where transactions are taxable for VAT Similarly to the concept of permanent establishment purposes. Most countries have, therefore, a set of (PE) for income taxes purposes, the term plays a central detailed legal proxies to establish VAT liability – known role in VAT, and is consistently relied upon by the in the EU as place of supply rules – which are not legislator, for both determining the place of supply of dissimilar in ethos to international allocation rules in services, and establishing the right to deduct input VAT. income taxes. In essence, they determine which coun- Yet, despite its significance, the term is far from clear, try is entitled to tax each specific transaction, just as and in recent years, the debate over its definition and international allocation rules determine which country scope, primarily in the context of our global digital is entitled to tax each specific item of income. Both economy, has intensified. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EC Tax Review Kluwer Law International

On the Evolving VAT Concept of Fixed Establishment

EC Tax Review , Volume 30 (6): 6 – Dec 1, 2021

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Publisher
Kluwer Law International
Copyright
Copyright © 2021 Kluwer Law International BV, The Netherlands
ISSN
0928-2750
Publisher site
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Abstract

ec Editorial TAX On the Evolving VAT Concept of Fixed REVIEW Establishment 2021–5&6 Rita de la Feria The relevance of the concept of fixed establishment (FE) required to determine where consumption has taken for the EU VAT system can hardly be over-stated. place, and thus where transactions are taxable for VAT Similarly to the concept of permanent establishment purposes. Most countries have, therefore, a set of (PE) for income taxes purposes, the term plays a central detailed legal proxies to establish VAT liability – known role in VAT, and is consistently relied upon by the in the EU as place of supply rules – which are not legislator, for both determining the place of supply of dissimilar in ethos to international allocation rules in services, and establishing the right to deduct input VAT. income taxes. In essence, they determine which coun- Yet, despite its significance, the term is far from clear, try is entitled to tax each specific transaction, just as and in recent years, the debate over its definition and international allocation rules determine which country scope, primarily in the context of our global digital is entitled to tax each specific item of income. Both economy, has intensified.

Journal

EC Tax ReviewKluwer Law International

Published: Dec 1, 2021

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