Editorial

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Editorial

The trend in rising VAT rates around the world shows no sign of abating as governments, desperate to balance their budgets amid falling corporate tax revenues look to make a fast buck.

Among economies with established VAT systems, the UK was one of a number which raised its rate this year, while there are plans for VAT hikes in Cyprus and the Czech Republic.

Raising VAT is considered to be less damaging politically than any other tax increase, though the plans have not been without opposition as critics charge that higher VAT punishes the poor, hits the retail sector and stifles the economy. In Greece, there has been the particular problem of fraud, where two consecutive VAT rises have threatened to push taxpayers into the black market and have caused the government to consider cutting the rate.

Despite rising rates, some countries have been looking at targeted VAT exemptions to stimulate certain areas of their economies. In Ireland this has taken the form of a temporary rate reduction for businesses such as hotels and restaurants in a bid to boost the tourism industry. If the saving is passed onto customers, which appears to be the case, the government may look to extend the special 9% rate beyond December 2013. And if initiatives such as this are seen to work, other countries may choose to follow suit with wider VAT reductions and exemptions designed to jumpstart ailing economies.

Even so, while indirect taxes are on the rise, several countries are close to or considering the introduction of VAT and GST, for example, India, as Khaitan & Co explain in their article.

International Tax Review's ninth edition of its Indirect Taxes Guide, co-published with six leading tax advisers, also has Ernst & Young exploring the latest developments in Russia, KPMG discussing how to reduce VAT costs in real estate transactions in Sweden, and HNP Counsellors Taxand looking at trends in Thailand. Meanwhile Atoz in Luxembourg pose the question of whether the VAT exemption for investment funds matches today's financial world, and PwC Germany looks at why the German Supreme Tax Court denies input VAT deduction.

As indirect taxes are only set to grow in importance for taxpayers, we hope you will find the insights these specialist tax advisers have to offer essential reading.

Salman Shaheen

Indirect Taxes editor

International Tax Review

more across site & shared bottom lb ros

More from across our site

The ruling underscores the need for companies to provide robust and defensible valuations of intangible assets, one partner tells ITR
Pillar two is certain to be a game-changer for tax advisers and their clients. Russell Gammon of Tax Systems outlines 10 reasons why
Despite a general decline in corporate tax rates around the world, jurisdictions are now more reliant on it than in 1990, a Tax Foundation economist found
Australian law firm Webb Henderson’s report said PwC had met 46 of 47 targets; in other news, the OECD has issued new transfer pricing country profiles
The arrival of a seven-strong team from Baker McKenzie will boost WTS Germany’s transfer pricing capabilities and help it become ‘a European champion’, the firm’s CEO said
Germany has forgotten to think about digital reporting requirements, a WTS partner claimed at ITR’s Indirect Tax Forum 2025
E-invoicing is currently characterised by dynamism, with fragmentation acting as a key catalyst for increasing interoperability, says Aida Cavalera of the International Observatory on eInvoicing
Pillar two and the US tax system ‘could work in harmony’, Scott Levine tells ITR in an exclusive interview to mark his arrival at Baker McKenzie
Peter White, who has a tax debt of A$2 million, has been banned for five years from seeking registration with Australia’s Tax Practitioners Board (TPB)
Wopke Hoekstra’s comments followed US measures aimed against ‘unfair foreign taxes’; in other news, Grant Thornton and Holland & Knight made key tax partner hires
Gift this article