VATupdate Newsletter Week 22 2026

FLOATING

If you own a boat, a car, or a bike, chances are you’ve spent time repairing it. A flat tire, a loose plank, a wobbly wheel, or that embarrassing moment when your bumper lost a fight against a parking-lot pole (the pole always wins). And that raises the age-old philosophical question: how much repairing can you actually do before you’ve created an entirely new object?

Replace every bolt, screw, plank, rope, sail or seal, and not a single original atom survives. Yet we still call it the same boat. Or do we? At what point does your beloved vessel become a Ship of Theseus built entirely out of invoices from the hardware store?

It brings to mind Otto Neurath, the philosopher-economist who said that knowledge is like a ship sailing on the open sea. According to Neurath, the sailors can replace parts along the way, but they can never rebuild everything at once. Unless they enjoy drowning. The ship stays afloat because they rely on whatever is solid enough at that moment. His point? There is no ultimate, untouchable foundation of knowledge. Just a self-supporting structure we constantly tinker with while trying not to sink.

So yes, something of the original boat always remains. Not because it’s sacred or irreplaceable, but because nobody is foolish enough to replace all the planks in one go.

And strangely (or maybe not), this maps perfectly onto VAT. The EU VAT system has been around since 1967, and despite countless repairs and renovations, the basic frame is still the same. We added intra-Community transactions in 1993, re-engineered the place-of-supply rules in 2010, and now we’re bolting on the entire VAT in the Digital Age structure – all while the engine keeps running.

The VAT boat may creak, groan, and occasionally leak in places you’d rather not look at, but it stays afloat for one reason: we never replace everything at once. The core concepts (goods, services, taxable persons, liability, input VAT deduction) are the sturdy beams we keep building on.

And that is oddly comforting. Because no matter how stormy the sea gets, we’re not starting from scratch; we’re just swapping planks.

The VAT ship sails on: held together by decades of rules, a few fresh nails, and the collective hope that nobody pulls out the hull “for simplification purposes.”

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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