Managing VAT in a borderless world of global trade : VAT trends in the European Union - lessons for the Asia-Pacific countries

This article examines the problems of managing VAT in a borderless world of global trade in the European Union where there are increasing numbers of non-established taxable traders (not established in the country of consumption). The article describes the weaknesses of the present VAT system and the prevailing procedures to manage VAT in the EU for non-established taxable traders. The article also deals with the EU's recent efforts to simplify the collection process and improve the tax audit for cross-border supplies of goods, services and tangible products in a destination-principle environment. The last part of the article draws some conclusions and presents lessons for federated states or countries embarked in regional trade agreements which phase out their customs duties and border controls.