Indirect taxation in an integrated Europe: Is there a way of avoiding tax distortions without sacrificing national tax autonomy?

Bernd Genser (), Andreas Haufler and Peter Birch Sørensen

No 212, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: The paper discusses the main arguments for destination- versus origin-based commodity taxation in the European Community's Internal Market. Destination-based solutions necessarily distort commodity trade in the Community because final con-sumer purchases can only be taxed in the origin country. On the other hand, an origin-based general consumption tax is not only neutral in a European context but it can also be combined with destination-based taxation in third countries in a non-distortive way. Furthermore, it is shown that the introduction of capital mobility does not affect the neutrality of an origin-based consumption tax. Finally, the paper addresses the administrative and political implications of a switch to the origin principle in the European Community.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp2:212

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