The indirect taxation in USA and Canada with DAGTVA
Other indirect tax systems on sales and services.
In the context of USA tax reform, DAGTVA is presented inside the GST/TPS environment and take account also VAT/RST tax systems for federal states in a union like: United-States of America, India, United Arab Emirates inside the Gulf Cooperation Council and all situations with central or several tax authorities and provinces or States. This page is dedicated for the United-States of America but European Union and Inter-American Center of Tax Administration and others in the same environment may refere to this page.
– DAGTVA indirect tax system is independent of the model of indirect taxation applied in the Country or the State. Even if this State is included in a federal union like United-States of America, India, GCC, etc( Note : GCC, India, UK, Spain, Italie, Greece, Portugal…etc adopt DAGTVA’s digital declaration system for invoices).
VAT – RST – GST – TPS and all versions of these indirect tax systems may be used without modification in the process for sliding to one tax system for another, with in VAT/RST environment a total taxation neutrality in B2B transactions.
These properties of the DAGTVA tax system allow to coexist in the same federation of States different tax systems. Then it is possible to see together several States that apply VAT (or a tax system closer to VAT with the same qualities), with others States using the GST or TPS, because the DAGTVA tax system is not exclusively dedicated to VAT. For example, California and Virginia can be taken into this new tax system and other States retain the current tax system. The quality of DAGTVA offers both States the possibility of having preferential relations in the same taxation system without changing their tax laws.
The DAGTVA process makes that it is possible to extract the indirect tax inside the payment without attention to the tax system used. It then becomes possible to refund this indirect tax on the payment, without changing the tax regulations and laws of the various States of the United-States. This property makes it is possible to concerve the GST / TPS tax system as today and to have the same tax returns qualities of tax revenues as the VAT (Inside the companies, the VAT not penalize by tax, investment and labor, it is very important for the competitiveness of these companies in the world economy), qualities observed in the economy inside the other OECD members with the VAT environment. This is very important for the introduction of a consumption tax without this tax being exactly VAT and possible it is the X-TAX describe in the Blueprint Tax Reform. Indeed, setting up VAT as it’s in the European Union could not be done without changing the United-States Constitution, with an impossible agreement between 52 States that have their own tax laws. DAGTVA bring a simple solution at these problems.
– In any case, at no time, with the DAGTVA indirect tax system, the opportunity would be given to taxable persons or companies in these countries to collect a GST or a collected TPS due to them on behalf the treasury, in a federated State or a province.
– The DAGTVA procedure is the same on TPS/GST taxation as on VAT environment (with DAGTVA), until the decision is made, with VAT, to refund the payment of the tax to the buying company. Without disadvantage, only the refundable portion of the deductible VAT, which does not correspond to an equivalent local tax, would not be dealt with DAGTVA. Each State may be applied the refunded GST (RGST) like (equivalent) VAT between companies and keep the actual tax system. The result in coffer’s States is the same with the VAT, but is not exactly the VAT.
– DAGTVA would bring annually $ 100 billion to the tax authorities of the United States of America on a better indirect tax process and in different frauds recovered.
DAGTVA can also recovered annually 10% of income tax in Canada. (OECD 2010 report and it’s certainly worse today).
Important Note: Since the new version of DAGTVA in 2018 which no longer modifies, inside the banking system, the transaction. This slideshow was elaborated in the context of Brexit and to give an answer at the request by the G20 at OECD to bring a solution in the framework of a global single taxation. This slideshow replaces these presented below. The declarative system is modified in consequences. These sideshows are conserved in the presentation of this page as an history, an evolution of this new tax system.
Deprecated slideshows : (the VAT presentation adapted for the GST and the text adjoined at the conference of IVA, the International VAT Association in Vienna (Austria) in May 2016).
Other processes below and declarative systems
Deprecated – B2B domestic transactions GST – Tax collected on the production side.
Deprecated – B2B domestic transactions GST – Tax collected on the consumption side.
Deprecated – B2B cross-border transactions GST States – Tax collected on the consumption side.
A new version of DAGTVA, more efficient may be applied for USA is now ready for use and this version is proposed in the special case of Brexit and the finding to obtain an international fair tax system.
The two latest choices are without contest best, because it is the same technical device and process applied for a cross-border transaction in these two cases and with this, it is possible to collect the consumption tax also on e-commerce in the country of the purchaser, even if the seller’s country is outside the federal organization of the purchaser.
– DAGTVA would give an additional time to solve the problem of the fiscal cliff in the United States, corresponding to the time of deployment of the procedure, it would bring, very quickly, significant results on tax revenues for the public treasury and tax authorities. DAGTVA can coexist without problem with the current system by reinforcing the cohesion between the different taxations systems applied in the States.
It is, may be, the solution for the new fiscal reform in USA today describle in the the Blueprint Tax Reform!
The DAGTVA tax system is also on behalf the ultimate consumer through the futur payment by phone and the possibility, for him, to have the indirect tax refunded on his purchase, this is on strait-lines on the fight against the poverty. Presentation and texts in November 2016 at the OECD WP9 (Indirect taxation).
The fight against poverty is the responsabillity of all in United-States of America. A national consensus must be found inside the Congress. It is impossible to accept that the poverty threshold officially concerns 43.1 million people, or 13.5% of the US population in 2015.
To conclude this page, as I have already written in August 2020, « regarding the subject to find a fair global taxation, everyone is looking for the solution while this solution is under our eyes and soon practically used all over the United States and in Europe from 2021 to 2025 in another form and thus be able to create, relatively without important legislative difficulties, an international taxation system with the bigest economic area bringing together the United States with Europe, to which United Kingdom, the fifth world economic power, can adhere easily, which already has the technical means of digital declaration of invoices with « Making Tax Digital » and which could lead and agregate the Commonwealth with it in this quest for a globalized tax system » .
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