The World Single Market

(The original French version)

July 2019 – By Jean-François Clocheau

Attention: these hereunder documents, from a personal study, do not reflect any position of the OECD vis-à-vis the proposal.

This document, in the spirit of a favorable global geopolitical situation, presents a plan that could, perhaps, complement the existing actions following the recent OECD report on the G20 in Japan and can tend towards the World Single Market.

This plan was created before the G20 in Japan and evocated for some OECD’s members present at the International VAT Association during the spring conference in Munich. It puts DAGTVA to be, modestly, a system which attempts to achieve the objectives that have been entrusted to the OECD to find a consensual solution to digital taxation. To quote the report: « Agreeing on a sustainable and workable solution compromised and the G20 leadership can be instrumental in this process. In order to meet the G20’s deadline of 2020, political agreement needs to be reached soon on the fundamentals the solution« .

But before entering into the details of this plan, as it says before, it appears that only, like it has been confirmed, OECD by its structure and its political position can support the project whose purpose is described in these documents.

The three points of this overall plan in the order of importance:

  • We know that in the world $ 1500 billion of tax revenues are stolen every year! Recovering a large part of this fraud is to give the financial means to the States, almost all indebted, to engage the fight against the warming climate change, a struggle that they can not finance today because of this debt, before the no return point reached. It’s an absolute emergency! As Joseph Stiglitz says: “The climate crisis is for third world war”.
  • To provide, by a third way (and voice), an acceptable solution for United Kingdom and European Union within the Brexit framework before the end of October with the following aims:

o Probably without Brexit agreement, avoid a dismantling indirect tax structures in the European Union without solution, with effects whose consequences can not be measured today. Explained on these articles (pages: 490349264984).

o Not to change the economic and social structures of the land borders between United Kingdom and European Union, which are largely defined by the indirect taxation contained in cross-border transactions,

o Consequently, the solution that I will expose and propose for any possible land borders, to move theses borders on invoices with the preservation of the United Kingdom’s integrity and peace in Ireland,

  • Fight poverty by changing the indirect taxation paradigm by removing the different tax model that separates the ultimate consumer from the corporate one, in the context of an ever-changing economy more disruptive, (partly explained in a presentation at the OECD in November 2016, with the compulsory accession of the poorest to the banking system),

Links between these first three items and the main purpose of the project.

In fact these three crucial points have a common relation which is the indirect taxation and the fact to solve the problems of one of them, can bring, by chain reaction, a solution for the others.

Main goal

It is a solution that would give birth to a World Single Market, comparable in its aims and effects which is applied in the European Union but with a simpler, efficient and transparent taxation process, integrating everywhere the billion people in the world who do not have access to the banking system. It would be to benefit from the solidity of the international structure of this banking system, pillar of economic stability, as one of the partners of this new fiscal paradigm.

To also propose an international solution to avoid the fraudulent drifting that appears on the horizon after the decision Wayfair Inc. by the Supreme Court in USA and elsewhere (subject treated further) then, to use this new directive to include USA in a unique system of indirect taxation.

The circumstances favorable of the plan?

In fact, the states of the world find themselves in a geopolitical and fiscal situation exceptionally favorable to a global modification of the tax paradigms of indirect taxation with:

  • Digital statements of invoices now almost everywhere in the world (study by PwC Michaela Merz: « How the World of VAT / GST will look in five years from now » presented at the International VAT Association’s conference in Stockholm 10/2018) are setting up electronic billing systems in DAGTVA 2012) (page n °: 5315 §a),
  • The US Supreme Court in June 2018, which rendered a decision on the case-law: South Dakota c. Wayfair Inc.,
  • The European Union is implementing a similar system than Wayfair décision for 2021 with France advancing this one-year system by 2020.
  • The United Kingdom, with MTD, which has just acquired the declarative means of local B²B transactions also affecting cross-border transactions. The HMRC would look with interest at the US decision which provides, as in the EU in 2021, to involve foreign online sale platforms by asking them to levy sale taxes.

Where are the links between these four other sections?

Clearly, the current IT capabilities allow us to link these four previous points, with digital billing statements and with the internationalized Wayfair Inc.’s decision, to see a foreign company where an online sale platforms to withhold a tax on a payment  and send it in the buyer’s State.

What will you be offered , it is to use this Wayfair Inc.’s decision ‘internationalized’ in a new taxation system dedicated for VAT or GST, system in agreement with these future new regulations that no State could refuse, by controlling processes by giving all control roles to the countries’s tax authorities.

What short-term planning?

The ideal would be to be able to present a first proposal before the exit of the United Kingdom from the European Union on October 31. It is very short but not impossible to achieve.

« OECD Secretary-General Angel Gurria is presenting G20 finance ministers and central bank chiefs meeting in Fukuoka with a » road map « , already signed off by 129 countries, in a bid to clinch a long-term solution by 2020 ».

The fact that United Kingdom is probably heading for a Brexit without agreement can motivate to propose something quickly, even if it is a draft. The important is to intend a movement while saving time for the OECD to present a final project with a longer-term solution.

In what will be presented, United Kingdom, present in the G7 in Biarritz in August, is the masterpiece, the cornerstone of this plan. This planning refers to the exit of the UK and show the VAT treatment under Brexit conditions, but in the Wayfair environment. That’s why all slide shows and explanations will involve United Kingdom in the cross-border transactions.

In the USA with the Wayfair decision,

Foreword: With the Wayfair Inc.’s decision, in order to collect sale taxes so far impossible to recover in cross-border transactions, a foreign company will be forced by the buyer’ State to transmit on them, the sale taxes. It can be estimated with the decision Wayfair Inc. that there will be an improvement on the tax returns for the federal State of the buyer, but this State will not be the master in the transaction because it not will at the origin of this taxation! For example, how will he control on what is being taxed in dematerialized companies, such as online sale platforms who’s installed with headquarters outside the United States?

It is the resolution of these questions that will be explained.

Three cases are possible:

  1. The foreign supplier, master of the end-to-end transaction, including delivery, will have to pay the sale taxes directly or through its tax authorities.
  2. The supplier is the subcontractor of an online marketplace but he is at the origin of the transaction, the payment will be made, from the buyer’s State to the seller’s State on behalf of the provider who will levy the sale taxes and return it to the buyer’s State or local tax authority. For the online marketplace that ensures the storage and delivery, its will take and pay back the sale taxes on the price of her services (maybe?).
  3. The supplier is the subcontractor of an online marketplace. It is completely transparent. This is the online marketplace will levy the sale taxes and will pay de facto the provider Net Amount! This is the split payment by default made by a digital intermediary which we do not know where it deals with its transactions! Nobody will know if he will collect all taxes due on payments! Will he declare everything for B²C transactions if we know nothing about the ultimate consumer in the country of consumption? How long will the online marketplaces pay for all of its only known suppliers? On what tax basis will the suppliers be paid Net Amount if they do not know to which state the sale took place so the taxation applied in this State? What will they have to report on their turnover in their country of origin, etc.? Hence a massive international fraud predictable by a stack of intermediate companies, between the online marketplace and the supplier, companies responsible for blurring the tracks.

We will see later in the slideshows’s comments that we will not let the selling company or the online marketplaces, the initiative to make this split payment on behalf of States. Fraud on sale taxes will then be impossible, even in B²C transactions.

The Wayfair system in the European Union and in the World.

Some dysfunctions are showed and possible embezzlement of this system that opens the way to massive international fraud. It is not surprising then to see some international online marketpaces rush to play the Good Samaritans and to be the sale taxes’s collectors to the profits of States, sums that belong to the States and let credited them on their own bank accounts before repayment, if restitution there is!

This Wayfair tax. or related decision would be applied: in USA, Europe and United Kingdom, whether there is agreement on Brexit or not, on the 10% of 46% of global GDP (source IMF 2018) on transactions made on the Web.

It can be argued that China, which has a digital invoice reporting system, which would be paid with this system, Net Amount, by non-Chinese online marketplaces, would do the same on Alibaba‘s transactions, and other Chinese online marketplaces on non-Chinese payments, whether on transactions in China or cross-border. So, all Chinese companies in Wayfair Tax environments would apply the same process. The consequence, it is now necessary to add the 10% of the $ 13,400 billion of China’s GDP which will rise to 65% of the world productions impacted in their payments by the application Wayfair Inc.’s decision.

This decision impacting de facto the rest of the tax environments with the associated transactions! Then, it would seem difficult for the rest of the world economies not to join this process, which will not work very well but can be improved.

If nothing is proposed seriously, we will witness a spiral that will only exacerbate the suspicion between States, accusing each other through cross-border transactions of keeping sale taxes, suspicions that no State will be able to stop if other international decisions are taken before.

A system leading to the same result as the Wayfair Inc. decision will be applied in 2021 in the European Union and France will anticipate this date.

To quote a part of an article May 11, 2019, by Richard Asquith on

Title « France marketplace VAT liabilities and split payments« 

« France is proposing to make online marketplaces responsible for the remittance of non-EU merchants’ VAT on certain transactions from 2020. This would be one year ahead of ‘deemed supplier’ obligations for marketplaces agreed across the rest of the European Union.

The proposal includes a VAT split payment requirement. This would oblige marketplaces facilitating payments for non-EU third party merchants, to separate any VAT due and remit directly to the French tax authorities. » etc.(the whole article on the website). End quote.

We see the same problems of massive fraud in the United States as with the VAT in Europe which, following the split payment, would be held by the international online marketplaces. B²C global e-commerce revenue was $ 2304 billion in 2017, up 24.8% from 2016, according to e-Marketer. Online sales now account for 10.2% of worldwide total retail sales, up from 8.6% in 2016 and 7.4% in 2015.

It could be estimated that the total GDP of the World is $ US 84,740 billion in 2018 (source IMF), the 10% of this global GDP made by online sale platforms is $ 8474 billion. It would not be tolerable that, by updating and taking an average rate of 20% of taxes, nearly $ 2,000 billion in sale taxes, belonging to the States of the World, would be permanently, by working capital, on the accounts of GAFA(s) and other online marketplaces!

Dizzying sums that can be used for the worst malpractices!

This working capital of $ 2,000 billion of sale taxes that would be on the accounts of GAFA(s), it is not fraud but a lack of cash-flow for the States of the World. This $ 2000 billion cash-flow can only be recovered once. It will make it possible to finance, without affecting the State’s budget balances, the beginning of the fight the climate warming. It was written at the beginning of this document that in the world $ 1500 billion in tax revenue are stolen every year.

These $ 2000 billion are not a part of it; they are a supplement, fruit of serendipity, a happy sequence of processes.

Comment: One can nevertheless be surprised to see, with the Wayfair Inc.’s decision, possible but surprising situations, if in South Dakota a web-surfer buys on Alibaba a Chinese product, to see a Chinese company or the Chinese tax authorities levy an US sale tax that Alibaba will be able to credit on its Chinese account, before possibly paying it back or maybe not, if the buyer is an unknown ultimate consumer and if no guarantee of transfer of these sale taxes to profit the buyer’s State is found?

A part of the US indirect tax amount would then be stored in bank accounts in China! Oops! That would not arrange the US-China relationship!

So why would the fraud problems be the same in the US where there are only sale taxes with the GST(s) and in the European Union under a VAT system.

In fact, the settlements due Wayfair Inc.’s decision and the future European directives will operate at the same stage of the transaction, well before the VAT appears, when the buyer’s VAT is refunded in the B²B environment on his purchases. Everything goes, in both indirect tax systems before this stage, in a production environment.

For having a perfect functioning of this Wayfair process, it would be necessary:

  • That, no longer be private companies, such as online marketplaces, whose jurisdiction it is unknown, which would credit in their private bank accounts, the amount of sale taxes, already, in this transaction’s stage, the property the buyers’ States when sale invoices are created,
  • That the banking system, payment partner, instead of online sale platforms that, if not responsible by default the splitting payment, be empowered to validate and authorize national and cross-border payments. These capabilities offer guaranties to have all transactions treated crossing the banking system. (The chiefs of the main central banks were present at the Fukuoka G20).
  • That the separation of the tax included in the requested payment will be levied by the seller’s tax authorities and not after the buyer’s payments when these payments, taxes included, will be credited in the seller’s account.

The positive side of decision Wayfair Inc.

But we must see the positive side of the “internationalization” of this model of transactions where, by default, sale taxes would be ‘separated’ by a split payment imposed. This would be the creation of a World Single Market, where there would be only without sale taxes values ​​in interbank payment transactions. This interesting functioning which will remain the ultimate option described in DAGTVA, leave for the intermediary place to « Wayfair Tax version » where we will seen the sale taxes circulating in payments. The main benefit of this option it is to include B²C transactions in a unique withholding tax process and payment.

There are 6 cases of possible transactions. They are treated in cross-border situations with United Kingdom as one of the two States involved in the transaction.

Solving the cross-border tax problem provides de facto a solution for the domestic transactions. In these cases the Wayfair Tax transfer procedure will be irrelevant, with the sale declarations made in the country of consumption.

The DAGTVA solution involves operating the Wayfair Tax with tax-related payments which eliminates the differences between the B²B and B²C transactions.

This is the end of the difference in the process of indirect tax treatment between B²B and B²C.

Note: To read the transaction slideshows comfortably, open the .pdf files below, then in Acrobat Reader, click Display and choose the full screen mode. Finally, use the mouse wheel to scroll through the slides or the arrows up and down in the upper tools bar.

General cases in B²B transactions:

  1. Direct B²B transaction buyer in UK, seller in EU or elsewhere,
  1. Direct B²B transaction seller in UK, buyer in the EU or elsewhere,
  1. B²B Transaction in buyer in UK, GAFA seller in the EU or elsewhere,
  1. B²B GAFA seller transaction in the UK, buyer in the EU or elsewhere,

B²C transactions including special cases of reimbursement of all or part of the purchase taxes for the poorest final consumers:

  1. B²C Transaction buyer in the UK, GAFA vendor in the EU or elsewhere,
  1. B²C GAFA seller transaction in the UK, buyer in the EU or elsewhere,

– – – – Study of a transaction – – – –

Only one B²B transaction will be commented. It is the Direct B²B transaction, buyer in UK, seller in EU or elsewhere in a Wayfair Tax environment.

All other types of transactions made by intermediaries in B²B on a main transaction in B²B would have an identical process.

Important: Choose the slideshow: wsm_b2b_direct_buyer-uk_wayfair.pdf.

Slide 10: The actors of the transaction.

Slide 12: The environment of the transaction.

Slide 13: A purchase made on the Internet in B²B on a website owned by the seller company,

  • Digital Sale Statements and the Output Tax to the seller’s tax authorities.

Slide 14: The buyer, with the invoice of the sale, makes the digital statement of the purchase on MTD.

  • Request by the tax authorities of the seller to the seller’s bank for levying of sale taxes declared.
  • Sale taxes deducted from the seller’s account.

Slide 15: The sale taxes are credited to the seller’s public treasury.

  • Tax authorities receive a sale taxes credit.
  • The selling company receives a payment tax notice of sale taxes.

Slide 16: With the OECD‘s BEPS agreements, the sale taxes, with all other informations, are transmitted in real time to the HMRC, the buyer’s tax authority and notified in MTD.

Comment: with this transfer between tax authorities, the OECD’s BEPS guidelines are effective on each transaction before accounting and tax closing and not a posteriori on judicial requisition.

Slide 17: The Wayfair Tax is credited to the UK Treasury.

Slide 18: HMRC Issues the Tax Clearance Authorisation (TCA) to pay the transaction by buyer’s bank.

  • The HMRC sends by e-mail the export labels for the vendor company with barcodes and all information for import into the UK. Customs controls may take place anywhere between the place of dispatch and the receipt of the parcel.

Comment: This system renders useless the land borders that are envisaged between United Kingdom and the European Union for the transactions of material goods and also immaterial when it comes to services, by the fact that the customs control is done at the level of billing by its associated digital tax returns and not in a country during the delivery, where it can still occur.(Declarative system B²B – cross-border transaction: Slide 26).

This property of DAGTVA strengthens The Agreement, which was signed in Belfast in 1998 between the two Ireland, in the framework of Brexit, preserving peace on the island.

  • The HMRC sends by e-mail a copy of the export references of the transaction for customs checks by the seller’s tax authorities.

Slide 19: The buyer sends his bank a payment order all taxes included. Comment: With this type of payment, there is no difference between a business registered at the VAT and an ultimate consumer.

Slide 20: With the tax authorisation TCA of the transaction, the bank debits the buyer’s account all taxes included and returns a payment notice.

Comment: We see that without TCA, it is impossible to transmit to the seller’s bank the payment request.

Unlike the first version of DAGTVA which planned to forward this TCA with the complete payment, this new version does not modify interbank transactions.

This TCA is the guarantee that the HMRC has been credited with the foreign sale taxes. The seller’s tax authorities can not therefore avoid this transmission of the sale taxes. They are forced to locally levy this sale taxes on the seller’s account which may be an online marketplace and in no event will this sale taxes are in the possession of the online marketplaces.

It would also be impossible not to use the banking system which prohibits any use of encrypted currencies such as Bitcoin or the new ‘Libra’ of Facebook!

We also see that with the procedure described in the slide 18 where it is the HMRC that produces the import documents and they would be impossible to produce these documents otherwise. For the security of the State’s finances, there would be impossible to pay with an encrypted currency in domestic or international transactions.

As it has been demonstrated, the sale taxes fraud are impossible to set up and it’s will be US $ 2,000 billion sale taxes in working capital that would be now in the State’s coffers to start financing the ecological transition!

Without modification of interbank transactions, it would therefore be immediately applicable by the banking sector which operates everywhere in the world in the same manner.

Slide 21: The all sale taxes interbank transfer credits the seller’s account.

Slide 22: The seller’s bank sends him a credit notice.

Slide 23: The seller is informed.

Slide 24: The HMRC can refund (in VAT environment) the sale taxes collected, not from the buyer’s account, but by the Wayfair tax levied on sales abroad.

Comment: credited by the Wayfair Tax, it is this same tax that is paid to the seller by the buyer’s payment. This Wayfair Tax is a deposit, a « security » for the buyer’s tax authorities and in the VAT tax system in B²B, this system will be completely neutral. In fact, this TAX « value » has been credited by the seller tax authorities also corresponds, on the buyer country in United Kingdom, to an Input VAT declaration in slide 14.

At this level of the process, it is easy for the HMRC to match the two tax returns made in slides 14 and 16 (applied in G.C.C. and India). United Kingdom would be the third international tax system to apply this control.

We also see that HMRC will pay (in B²B) this « VAT / Sale Taxes » only after the payment of the VAT included in the all taxes buyer’s payment. The buyer (in B²B) is therefore forced to pay this tax before its reimbursement. This process eliminates all possible fraud!
The time between the Wayfair Tax credit and the refunded Input VAT gives a « working capital » for the buyer’s tax authorities! There will be no possibilitises to see also, at any moment during the transaction’s process, an existing double taxation for the buyer or seller.

The UK Treasury does not advance payment, it just « slide » a foreign sale taxes which is also the Output VAT by an Input VAT.

In other slideshows in a foreign tax environment such as the GST, this sale taxes may or may not be refunded to create an environment similar to VAT tax system and we see that the foreign indirect taxation system used by the seller’s country is not taken into account.

This property allows all indirect taxation systems to coexist in the transaction and effectively can integrate USA into a system comparable to the VAT (see slideshows of transactions whose actors are reversed).

It is the technical possibility to have the World Single Market.

This is was explained in the page of the website DAGTVA concerning USA and Canada (page=399) with the possibility for USA to have a RGST (Refunded GST) equivalent to VAT without having to modify the Constitution of USA while respecting WAYFAIR Inc.’s decision.

Slide 25: The balance of payments shows total neutrality in B²B cross-border transactions.

Comment: it is the foreign buyer’s payment who although paying all taxes included his purchase will not balance the sale taxes that will have been taken from the seller’s account. The seller is therefore paid Net amount by default by a split payment prior to the payment of the transaction. It is a bit hard on the accounting but very effective.

Detractors of this solution will say that the cash-flow of these marketplaces is missing between the time when sale taxes are collected and the buyer’s payment, but one can think that, given the capitalisation levels of these online marketplaces, the cash-flow amount is not exactly their first priority! 

The seller’s tax authorities are also not in possession of this sale taxes which proves that the tax has been passed on to the buyer’s State.

****** End of slideshow ******

For B²C transactions including special cases of reimbursement of purchase taxes for the poorest end consumers:

These possibilities were explained in a presentation at the OECD WP9 in November 2016 in the frame of the payment by phone and the progressively disappearance of cash in Sweden and Denmark.

It is also the obligation to have a TCA in the transaction, hence the need to pass all transactions through the banking system.

The ultimate consumers, even the most destitute, could not be excluded, as is the case today, from this banking system.

With this World Single Market, we can consider with few exceptions that the entire population of the planet would have access to the benefits of this banking system!

About Brexit and Conclusion.

A description of the probable post Brexit situation under the current conditions, which does not take account these documents, is exposed in this pages (5315) & (page n°: 490349264984) with related articles which, in spite of the political evolutions at United Kingdom, still remain relevant.

These articles about the Brexit show that the situation, before the possible application of the Wayfair’s decision applied in United Kingdom and European Union, blew up the European Single Market for creating a new indirect tax system with the same advantages than today but more efficient.

The solution proposed in this document would make it possible for the European Union to avoid a trans-boundary tax situation temporarily suffered and destructive.

NOTE: The Wayfair Inc.’s decision is in fact the first version of DAGTVA where taxes were levied in one State to be returned to another but with a split payment by the seller’s bank, whereas in the present documents it’s will be the seller’s taxes authorities which automatically levy the sale taxes after the tax return done, when the invoice is created (a bit like in Rwanda). This original DAGTVA’s splitting version, technically possible, but lacking a worldwide interbank agreement, potentially impossible to find, made the process utopian, as it says, on DAGTVA, Damien Falco in his thesis « La fraude à la TVA » which received the prize for DALLOZ 2018 theses and recently the thesis prize of the Court of Auditors in France!

Today this not an utopian process exposed in the 2015 slideshow, the « long bank payment by bank transfer » explained for an educational purpose shows these reversions of sale taxes or VAT from a foreign country.

This slideshow is always available at (page n°: 95) slide 33 for the domestic transaction and slide 34 for the cross-border transaction (equivalent Wayfair Tax).

This slideshow in 2015 foreshadowed this Wayfair Inc.’s decision well before the US Supreme Court’s judgment with a possible application of DAGTVA in the US in RGST (page n°: 399) without needing to amend the US Constitution and can tend towards the World Single Market.


DAGTVA in the Wayfair environment would allow for a consensual solution that is acceptable to everyone beyond Europe:

  • With tax revenues expected by the States,
  • To finance the ecological transition,
  • To avoid and moving land borders to invoices,
  • By proposing a cross-border solution for Brexit,
  • Consequently preserving peace in Ireland,
  • With an international fraud impossible to set up,
  • The possibility for all to access the banking system,
  • To eliminate the difference in tax treatment between the company and the final consumer.

In the words of the OECD: « Better Policies for Better Lives ».

Jean-François Clocheau