Evaluación de exenciones de IVA

Dialogic, in collaboration with SEO Economic Research, has conducted the periodic evaluation of VAT exemptions. Specifically, the focus was on three optional exemptions (services provided by undertakers, writers, journalists, and composers, as well as lectures and similar activities) and the fundraising exemption (a mandatory exemption). The evaluation had four main objectives: (1) Providing insight into the effectiveness and efficiency of the optional exemptions; (2) Answering questions in the assessment framework for fiscal arrangements for optional exemptions; (3) Providing insight into the consequences of abolishing optional exemptions and alternative measures; and (4) Providing insight into the effectiveness and efficiency of turnover thresholds within the exemption for fundraising activities. The effectiveness and efficiency vary per exempted group and are addressed separately in the report. Below we provide a brief overview of the objective achievement, effectiveness, and efficiency per exemption. Undertakers The VAT exemption for undertakers serves two objectives: no VAT on grief and better affordability of the services. The study concludes high efficiency for both objectives but also signals of incorrect use. The level of efficiency varies per aspect, with average administrative burdens, high implementation costs, and unspecified economic benefits. Recommendation: We see no reason for abolition, but we recommend reviewing whether the current implementation and delineation of the exemption still meet societal needs. Writers and Journalists This exemption has two objectives: improving the affordability of news provision and alleviating administrative burdens. The report concludes a high level of objective achievement but also notes signals of incorrect use. The effectiveness of 'better affordability' is average due to this group having both customers who can and cannot deduct VAT on purchases. The effectiveness of administrative burdens is high for writers and average for journalists. Efficiency regarding administrative burdens is high for writers and average for journalists. The efficiency of implementation costs is high, but the economic benefits of this exemption are unspecified. Recommendation: We see no immediate reason for abolition since this exemption is moderately to highly effective and has relatively lower implementation costs. If abolition is chosen, placing it under the reduced rate could ensure that the price reduction effect is not completely lost, but it would retain issues regarding delineation and administrative burdens. Composers The purpose of this exemption is twofold: improving the affordability of news provision and easing administrative burdens. The research concludes a high level of objective achievement but also notes signals of incorrect use. The effectiveness of the ‘better affordability’ objective is low as customers are often subject to VAT and purchasing costs are low. The effectiveness of 'reduced administrative burdens' is low due to the mix of VAT-taxable and VAT-exempt activities. The efficiency of these exemptions is low for administrative burdens, high for implementation costs, and low when considering economic benefits. Recommendation: We see a reason to abolish the exemption due to low effectiveness, complexity in applying deductions, and the unclear link between composing music and news provision. We also see no reason for introducing the reduced rate. Journalistic Cartoonists The purpose of this exemption is twofold: improving the affordability of news provision and alleviating administrative burdens. The research concludes that the objective achievement is low, the exemption is optional, and is found to be very limited in use. The effectiveness of both objectives is low due to limited usage. Efficiency is low in terms of administrative burdens and economic benefits and high for implementation costs. Recommendation: We see a strong reason to abolish the exemption for cartoonists due to low objective achievement and efficiency. We also see no reason for introducing the reduced rate. Lectures and Similar Services The purpose of this exemption is to promote science and general knowledge. The research concludes that this exemption has low objective achievement and strong indications that the exemption is rarely utilized. Effectiveness is low due to limited usage, as is efficiency. Recommendation: We see a strong reason to abolish the exemption for lectures and similar services since no objective achievement has been observed or is expected, and alternatives such as an existing reduced rate for lectures and the Small Business Scheme (KOR) are possible fallbacks. Turnover Thresholds for Fundraising Activities The purpose of this exemption is to prevent involvement in value-added tax for minor ancillary activities. The goal achievement of the turnover thresholds is high. The effectiveness is also high, as entrepreneurs exceeding the thresholds are generally larger enterprises that either have a certain level of administrative skills or benefit from the deduction right. Unfair competition from associations appears to play no significant role. Efficiency in terms of administrative burdens is average, while efficiency in implementation costs is high. Recommendation: We see no reason to adjust the turnover thresholds. The majority of institutions fall below the turnover threshold, partly due to the canteen scheme. The report has already been submitted to the Second Chamber. Download the relevant Chamber letter here.