Post.doc.-project on ”Combating Tax Avoidance and Protecting the Internal Market – EU VAT Grouping (COMBAT)”

The 3-year post.doc.-project is financed by the Danish Council for Independent Research and the University of Copenhagen. Karina Kim Egholm Elgaard has been awarded the Sapere Aude-Research Talent Prize by the Danish Council for Independent Research based on the postdoctoral project.

Value Added Tax (VAT) revenue forms a significant amount of the total tax revenue of all EU Member States as it amounts to approx. 20-30% of total tax revenue for all EU Member States. In 2012, the VAT gap – i.e. the difference between the theoretically calculated VAT liability and the actual collections of VAT – amounted to €2 billion for Denmark, and €177 billion for 26 EU Member States.

The different implementations of the EU VAT grouping rules at national level are problematic in terms of VAT fraud and evasion, distortion of fiscal competition and the functioning of the internal market in the EU. Thus, the purpose of project COMBAT is to examine legal measures and solutions in order to combat VAT avoidance and protect the internal market and the EU VAT system by a comprehensive examination of the VAT grouping rules in Denmark, 5 selected EU Member States and New Zealand.

A core research question of project COMBAT is to examine to which extent the EU VAT grouping rules are in conflict with fundamental principles in the EU VAT system in relation to e.g. the definition of taxable person, the right to deduct, the VAT treatment of head office to branch transactions etc., in order to establish whether the rules on VAT grouping poses threats to the functioning of the EU VAT system itself and consequently the internal market in the EU, the former being a precondition for the latter.

Postdoctoral Fellow Karina Kim Egholm Elgaard, University of Copenhagen.