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International VAT Monitor
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Issue No. 4 - 2016 of the International VAT Monitor is now available online.

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Number 4 - 2016 contains the following:
EU VAT Neutrality in Question
Marie Lamensch
The 2016 European Commission VAT Action Plan: Weaknesses of a Clearing System and Possible Alternatives
Christian Amand
The European Commission VAT Action Plan suggests taxing intra-Community supplies of goods at the rate of the country of destination: the supplier would remit the VAT to his tax authorities, which in turn would transfer the tax collected to the tax authorities of the country of destination. Such a system is an extension of the one-stop shop regime applicable to e-services in place since 2003 and 2015 and it presents similarities with the proposal of taxation in the country of origin submitted by the Commission in 1987. At that time, this proposal was rejected because it required trust between tax authorities, caused currency exchange problems and gave financial advantages to a few large export Member States. The author suggests that these objections are still valid in 2016 and that they are specifically linked to the clearing system. A possible alternative would be to tax intra-Community transactions without clearing. Today, this is possible thanks to the various improvements in the European VAT system since 1991.
Cross-Border Supplies and Australia’s GST
Christine Peacock
In this article, the author provides an overview of the Australian GST rules relating to cross-border supplies. The author analyses the situation at the moment, and the recently approved changes to the GST rules relating to supplies from non-resident suppliers to Australian consumers that will enter into effect on 1 July 2017. To complete the overview the author explains the GST rules relating to supplies from Australia to a non-resident recipient.
Non-Reduced Rates for E-Books: Has the ECJ Allowed a Violation of Fiscal Neutrality?
José Manuel Macarro Osuna
The ECJ has finally confirmed that e-books cannot be subject to a reduced VAT rate, as is the case with books in physical form. The literal interpretation of the VAT Directive made by the ECJ seems to put the matter beyond any doubt. However, it does not clarify whether the different treatment given to these products, in circumstances where they would be considered to compete with each other, is compatible with the case law based on the principle of fiscal neutrality and with the TFEU.
The VAT Impact of Discounts to Parties outside the Traditional Distribution Chain
Jan Sanders
Since the ECJ case in Elida Gibbs, the VAT implications of most discounts are clear: the taxable amount is reduced by the discount that is provided. However, the outcome is much less clear when businesses provide discounts to parties that are not operating in the same distribution chain. Such complex discount schemes occur, in particular, in markets with pricing pressure like the pharmaceutical sector. In that specific sector, insurers and governments are coming up with pricing arrangements in order to control the rising drug prices. Along with these arrangements, additional cash flows often are created and third parties become involved. In this article, the author discusses the VAT implications of such pricing arrangements and gives real-life examples from Germany and the Netherlands. He concludes by outlining the various arguments that can be found in the ECJ case law in order to unblock the bottlenecks.
Reports from: Argentina, Australia, Austria, Azerbaijan, Bangladesh, Belgium, Brazil, Bulgaria, China (People’s Rep.), Colombia, Congo (Dem. Rep.), Czech Republic, Ecuador, Egypt, European Union, Fiji, Finland, Gabon, Greece, India, Ireland, Italy, Japan, Jordan, Kazakhstan, Kenya, Malawi, Malta, Moldova, New Zealand, Niger, Norway, Pakistan, Petroleum products, Panama, Peru, Portugal, Romania, Russia, South Africa, United Kingdom and United States.
Case notes from: Canada, Denmark, Finland, United Kingdom and United States.
Judgments in case C-128/14, joined cases C-226/14 and C-228/14, and in cases C-332/14, C-520/14, C-550/14, C-607/14, C-130/15, C-229/15 and C-263/15; an Opinion in case C-412/15; and Preliminary Rulings in cases: C-28/16, C-101/16, C-132/16, C-154/16 and C-164/16.