A new dimension to VAT convergence : inter-state cooperation for standardisation of legal regimes

Abstract

The relevance of International Law in value added taxation is not clearly well-defined. In a world economy still divided on the lines of territorial divisions; economic, social and cultural trade barriers still present a hindrance to further globalisation. Aptly this is starting to change with new diplomatic efforts being made unravelling arguably important results. The most significant result is the standardisation of value added taxation which is both a significant burden on the international trader and also an important source of revenue in most tax systems throughout the world. This thesis critically analyses the developments surrounding international value added tax to verify whether further convergence is tenable. It does so through a discussion of the main contributions made in the field in light of recent pertinent examples. This is followed by a detailed examination of the three main thematic limitations faced in inter- State collaboration. The first limitations are the political constrains faced by States with respect to diverse ideologies and interests. It moves on to look at the regional dissimilarities in individual rights in value added taxation procedures. It then ultimately looks into aspects faced by societies which are inconsonant with one another. This thesis argues that there is scope for an international policy which would encourage coherent standards in value added tax. These international measures need to be founded to prevent further inequalities. To achieve this end, the plurilateral agreement is thus identified as the most appropriate instrument for such a project. The main idea being to curtail flexibility through excessive rights of reservations which is synonymous with multilateral agreements.