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VATupdate Newsletter Week 22 2021

The Rubik’s Cube was designed by Ernő Rubik, a mathematician from Hungary. If you grew up in the 80s, this is probably one of the toys that you (and many others) have played with. And you either got very frustrated, or you managed to ‘break the code’, and solve the puzzle in a record time (either use the ‘layer-by-layer method’, the ‘corner method’ or just peel of the stickers…).

VAT is somewhat similar to the Rubik’s Cube. It seems very simple from the outside, but it may get you frustrated, and if you don’t understand the underlying mechanism and logic, you easily get lost. Therefore, many people just throw it away or just give up trying after some time.

Which is a pity. Because even if the mechanics and logics are not appealing to you, there’s a beauty in the outcome and principles. The problem is politics: they change the stickers on the outside, which makes the mechanics break and get stuck.

Take the topic of Fixed Establishments. The basics are simple: you either are established in a country, or not. Seem pretty black or white (or red and green) from the outside. Until you start turning the sides and corners, and come up with caselaw from the European Court of Justice. The Fixed Establishment definition may be clear, but how to use it in a specific situation may be different in each case, it seems.

In the Titanium-case from this week, the ECJ’s decision is very clear: without staff, there is no fixed establishment. But we all know: this can be different in the next case…

How can you fix a broken Rubik’s Cube? You can find several videos on YouTube to help you fix the Cube. The same applies to VAT. Not just on YouTube, but on LinkedIn, Twitter and probably TikTok (I haven’t checked that one) you can find guides, explanations, webinars, success stories and sales pitches on VAT. But despite all the good preparations, clear examples and solutions, there are always parts that seem to miss. Not only advisers are looking for solutions for this. Tax authorities and Governments are also trying to make the rules easier, more transparent, and better accessible.

In the Netherlands, the former State Secretary of Finance has advised the government to create a new Minister post for ‘Fiscal Affairs’. That person should make a clean slate within the tax authorities, and build a convincing, trustworthy and flexible tax authority, that not just ‘makes things easier’, but actually starts making tax (and VAT specifically) ‘more exiting’.

For us, it already is. As a former colleague once said in her interview: ‘I just love tax!’. Don’t we all?


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