The impact of VAT compliance on business

Value Added Tax (VAT) is now the most common form of consumption tax system used around the world. This analysis covers VAT and equivalent sales tax systems implemented in 145 different countries.

Although the principles of the tax are broadly the same everywhere, the rules can be enacted and implemented differently in different countries so that the compliance burden on business varies considerably.

This study has been undertaken to look at the differences in the time required for VAT compliance in different countries, and to demonstrate how the way in which taxes are implemented using different administrative practices can have a significant impact on the compliance cost for business.

This study uses data collected by the World Bank Group on the ease of paying taxes in different economies around the world as part of the Paying Taxes 2010 project2. It also uses supplementary data collected by PwC specifically for this study from a representative sample of the countries which have a VAT system.