VAT in a federal structure: the feasibility of implementation of a single, broader-based VAT in Brazil, within the parameters of the EU VAT model

Abstract: The Brazilian tax system is known to be very complex. The main reasons to that is presumably the fact that the federalist pact adopted by the Brazilian Federal Constitution gives a considerable autonomy to all federal entities (the federal government, the states, the Federal District and the municipalities) to impose levies. Besides that, the Brazilian tax system is composed by numerous levies, such as taxes, fees, special assessments, contributions and compulsory loans. Naturally, the consumption tax system is not different. Consumption in Brazil is taxed through different levies that are imposed by all federal entities. Therefore, a reform of the consumption tax system is often on the agenda but was never implemented. The European Union, on the other hand, has succeed with the implemention of a general, broadly-based and non-cumulative value added tax that is charged mainly at the destination. This thesis will perform, firstly, an analysis of both Brazilian and European consumption tax system to, finally, critically compare them. The aim is to examinate whether the implementation of a single and broader-based consumption tax in Brazil, within the parameters of the European value added tax, is feasible based mainly on an evaluation of the basis of assessment, the method of calculation, the rate system and the place of supply rule adopted by both consumption tax systems.