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Models of Cross-Border VAT Fraud

Author

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  • Silvia Fedeli
  • Francesco Forte

Abstract

The EU market's free circulation principle severs the VAT chain at the EU States' borders, thus, enticing VAT frauds. The increased "transit traffic" from outside EU with final destination in EU also contribute to VAT fraud. To examine this issue, we model some different collusive characters of these frauds, on which basis we explore their effects on the international trade and the domestic market.

Suggested Citation

  • Silvia Fedeli & Francesco Forte, 2009. "Models of Cross-Border VAT Fraud," Working Papers in Public Economics 123, Department of Economics and Law, Sapienza University of Roma.
    • Handle: RePEc:sap:wpaper:wp123
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    References listed on IDEAS

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    1. Basu, Kaushik & Bhattacharya, Sudipto & Mishra, Ajit, 1992. "Notes on bribery and the control of corruption," Journal of Public Economics, Elsevier, vol. 48(3), pages 349-359, August.
    2. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
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    Cited by:

    1. Sokolovska, Olena, 2016. "Cross-border VAT frauds and measures to tackle them," MPRA Paper 70504, University Library of Munich, Germany.
    2. Martin T. Braml & Gabriel J. Felbermayr, 2022. "The EU self-surplus puzzle: an indication of VAT fraud?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1075-1097, October.
    3. Silvia Fedeli & Francesco Forte, 2011. "EU VAT frauds," European Journal of Law and Economics, Springer, vol. 31(2), pages 143-166, April.
    4. Maria-Augusta Miceli, 2020. "VAT Compliance Incentives," Papers 2002.07862, arXiv.org, revised Feb 2021.
    5. Antonio Gómez Gómez-Plana & Pedro Pascual Arzoz, 2011. "Fraude fiscal e IVA en España: incidencia en un modelo de equilibrio general," Hacienda Pública Española / Review of Public Economics, IEF, vol. 199(4), pages 9-52, December.

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    More about this item

    Keywords

    European Union Value Added Tax; income tax and VAT evasion; VAT carousel; Nash equilibrium fraud-chain;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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