Insurance in European VAT. Current and Preferred Treatment in the Light of the New Zealand and Australian GST System provides a thorough legal analysis of the treatment of insurance in the harmonized system of European VAT as compared to the treatment of insurance in the New Zealand and Australian Goods and Services Tax (GST) systems. Insurance constitutes a significant part of the financial services sector, and it is one of the foundations of a modern society and economy. In the design of tax laws, however, whether and how to tax insurance is a complex issue that has become particularly controversial in the area of VAT. In the EU, as in most of the world, insurance is exempt from VAT, but New Zealand and Australia do not follow this practice. Given that New Zealand’s simple, comprehensive GST – called ‘the world’s purest value-added tax’ (and its modified Australian version) – do not appear to suffer from the shortcomings in efficiency and effectiveness that plague European VAT, a comparison of the two systems is in order. This book is thus the first to draw a comparative in-depth study of the treatment of insurance in the two systems.

What’s in this book:

Among the underlying issues and topics treated by the two systems covered are the following:

• who has a right to deduct input VAT in relation to supplies inherent in insurance arrangements and to what extent;
• what constitutes a supply of insurance and consideration for such a supply;
• what transactions fall within the scope of the VAT Directive’s exemption for insurance; and
• what draws a line between insurance and saving.

The analysis is grounded in a methodology in which concepts of European VAT are compared with concepts performing the same function in the Australian and New Zealand GST laws. The author concludes with proposals for reform in EU VAT in the light of experience in these two major non-EU countries.

Effective and deterrent methods of combating VAT fraud are crucial for the undisturbed functioning of EU internal market, provision of sound legal framework for taxpayers and protection of the integrity of the fiscal systems of the Member States. Artificial intelligence, algorithms and other technological developments involving big data analysis provide potent tools, which can assist tax administrations in enforcing taxpayers’ compliance and preventing fraudulent activities with an unprecedented efficiency and effectiveness. However, reliance on such tools in exercise of State’s powers must respect fundamental rights of taxpayers, such as the right to fair trial. This article examines the potential risks and necessary guarantees for the consistency with the provision of the VAT Directive and for the protection of the right to fair trial in the context of new technologies and enforcement of tax laws. The issue is analysed from the perspective of European Union Law and is based on an example of a Polish algorithm-based automated system of detection of VAT fraud.

Removing obstacles to e-commerce in the Single Market and ensuring effectivetaxation in the context of the digital economy has been high on the political agendaboth in the European Union and beyond. Recently the VAT rules on cross-border ecommerce have gone through a thorough modernisation with a package of newprovisions in the EU VAT legislation coming into effect as of 2019 and 2021. Furthermeasures with the objective of laying down solid foundations for an effective, fair,simple and fraud-resistant taxation of e-commerce transactions have been envisaged. This article helps to navigate a complex set of new provisions and offersreflections on whether the new rules will achieve their objective.