VAT and agriculture : lessons from Europe

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dc.contributor.author Cnossen, Sijbren
dc.date.accessioned 2019-05-20T10:07:31Z
dc.date.available 2019-05-20T10:07:31Z
dc.date.issued 2018-04
dc.description.abstract Little has been written about the treatment of agriculture under the value added tax (VAT). This article attempts to fill the void by surveying and evaluating the situation in the Member States of the European Union (EU) and some other countries. Farmers are often exempted from VAT for administrative and political reasons. But this means that the VAT on their inputs cannot be ‘washed out’ through the tax deduction/ credit mechanism. It then has to be borne by the farmers themselves or becomes an indeterminate and capricious element in consumer prices. To compensate farmers for the uncompensated VAT on inputs, the EU has devised a flat-rate scheme that permits them to charge a presumptive rate (approximately equal to the effective VAT rate on sector-wide inputs) on their sales to taxable agro-processing firms which, in turn, are permitted to take a deduction for this flat-rate addition from the VAT on their sales. Obviously, the flat-rate scheme is an arbitrary way of trying to achieve equal treatment between exempt and taxable farmers and between exempt farm products and other taxable goods and services. Full taxation, subject to the general threshold, appears to be the preferred choice. en_ZA
dc.description.department Economics en_ZA
dc.description.librarian am2019 en_ZA
dc.description.uri http://link.springer.com/journal/10797 en_ZA
dc.identifier.citation Cnossen, S. VAT and agriculture: lessons from Europe. International Tax and Public Finance (2018) 25: 519-551. https://doi.org/10.1007/s10797-017-9453-4. en_ZA
dc.identifier.issn 0927-5940 (print)
dc.identifier.issn 1573-6970 (online)
dc.identifier.other 10.1007/s10797-017-9453-4
dc.identifier.uri http://hdl.handle.net/2263/69175
dc.language.iso en en_ZA
dc.publisher Springer en_ZA
dc.rights © The Author(s) 2017. Open Access. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/). en_ZA
dc.subject Agriculture en_ZA
dc.subject Flat-rate compensation scheme en_ZA
dc.subject Incidence en_ZA
dc.subject Value added tax (VAT) en_ZA
dc.subject European Union (EU) en_ZA
dc.title VAT and agriculture : lessons from Europe en_ZA
dc.type Article en_ZA


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