Law Commons^™

Gcc Vat: The Intra-Gulf Trade Problem, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

It seems reasonably clear that by January 1, 2018 events will be set in motion for the adoption of a community-wide 5% value added tax (VAT) in the six Member States of the Gulf Cooperation Council (GCC).

The GCC’s Framework VAT document is expected to be published by the end of October 2016. One of the clearest, consistently placed observations is that the Arabian VATs will be destination-based and modeled on a European credit-invoice design. Intra-Gulf business-to-business (B2B) transactions will be effectively zero-rated by the supplier, and the buyer’s VAT will be directed to the destination jurisdiction. It is not …

Blockchain (Distributed Ledger Technology) Solves Vat Fraud, Richard Thompson Ainsworth, Andrew Shact

Faculty Scholarship

At the World Economic Forum more than 800 executive and technology experts were asked when they thought a particular “tipping point” would be reached – when would we see a government collect tax with blockchain? The agreed date was 2023 (on average). A full 73% of the respondents however, expected the tipping point to have been reached by 2025.

This paper argues that the EU VAT will be an early adopter, if not the earliest adopter of blockchain. There are a number of reasons why. Blockchain will bring substantial efficiencies to VAT collection. It will reduce costs, and build critical …

Sales Suppression: The International Dimension, Richard Thompson Ainsworth

Faculty Scholarship

Sales transaction taxes are highly susceptible to technology fraud, which is an inevitable result of today’s widespread reliance on technology to document taxed transactions. Technology can be (and is) manipulated to defeat the collection of these taxes. Both the U.S. retail sales tax (RST) and the European value added tax (VAT) are vulnerable to technology-based fraud. This Article concerns sales suppression — intentionally not recording sales — in the RST, and at the final stage of the VAT, the retail stage, when tax is collected from final consumers.

The modern electronic cash register (ECR)/point of sale (POS) system is vulnerable …

Vatcoin: The Gcc's Cryptotaxcurrency, Richard Thompson Ainsworth, Musaad Alwohaibi, Mike Cheetham

Faculty Scholarship

Bitcoin is the world’s first peer-to-peer cryptocurrency. VATCoin is similar, but it is used in tax compliance. Both Bitcoin and VATCoin are distributive ledger applications built upon blockchain technology. Bitcoin’s ledger is public; VATCoin’s is private. If adopted, VATCoin could well become the world’s first government-mandated cryptotaxcurrency. Unlike Bitcoin, VATCoin will not be a speculative currency. It is always fixed to the home currency.

This paper proposes that the Gulf Cooperation Council (GCC) adopt VATCoin in its VAT Framework. The GCC is expected to have multiple 5% VATs in place by January 1, 2018. There is an ample amount of …

Vat In The Gcc - Missing Trader Frauds, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

All VATs are susceptible to missing trader (MT) fraud. VATs adopted in an economic community are particularly more susceptible. The EU, for example, loses in excess of €100b annually to this fraud. Given the anticipated adoption of a European-style credit-invoice VAT in the GCC by January 1, 2018, this paper offers a technology-based solution involving the real-time tracking of taxable transactions with centrally collected (securely encrypted) data flows that are risk-analyzed by artificial intelligence (AI).