Derivatives and the European VAT system : derivatives in the context of the scope of taxable supplies / Marja Hokkanen.

Format:

Book

Author/Creator:

Hokkanen, Marja, author.

Series:

Doctoral series ; Volume 55.

Doctoral series ; Volume 55

Language:

English

Subjects (All):

Derivative securities--Taxation--Law and legislation--European Union countries.

Derivative securities.

Physical Description:

1 online resource (xix, 397 pages).

Edition:

1st ed.

Place of Publication:

Amsterdam, The Netherlands : IBFD, [2020]

Summary:

The book aims to define the most common types of derivatives in terms of the scope of the European VAT Directive and in terms of exempt financial services.

Contents:

Cover

IBFD Doctoral Series

Title

Copyright

Dedication

Preface

Abbreviations

Chapter 1: Introduction

1.1. Introduction

1.2. Derivatives and VAT

1.3. Purpose of the study

1.4. State of research

1.5. Methodology

1.6. Structure of the study

Chapter 2: The European VAT System

2.1. The nature of VAT as a tax system

2.1.1. Introduction

2.1.2. VAT as a consumption tax

2.1.3. The scope of VAT

2.1.4. VAT exemption

2.2. Fundamentals governing the European VAT system

2.2.1. Introduction

2.2.2. Interpretation of the VAT Directive

2.2.3. VAT and the principle of neutrality

2.3. Status of regulation

2.3.1. Derivatives regulated in the VAT Directive

2.3.2. The Council Implementing Regulation

2.3.3. Impact of the lack of regulation

2.3.4. European Commission proposals to regulate derivatives

2.3.4.1. Purpose of the proposals

2.3.4.2. Exemption of derivatives

2.3.4.3. Lack of results at the EU Council

Chapter 3: Characteristics of Derivatives

3.1. Introduction

3.2. What are derivatives used for?

3.2.1. The purpose of derivatives

3.2.2. Speculation and arbitrage

3.2.3. Hedging

3.2.4. Other reasons to trade

3.3. Trading platforms

3.3.1. Where are derivatives traded?

3.3.2. OTC derivatives: Documentation

3.3.3. Margins and collateralization

3.4. Most common derivatives

3.4.1. Introduction

3.4.2. Options

3.4.2.1. The nature of an option

3.4.2.2. The settlement of an option

3.4.2.3. Price paid for the option right

3.4.2.4. Examples of options

3.4.3. Forwards and futures

3.4.3.1. Forwards

3.4.3.2. Futures

3.4.4. Swaps

3.4.4.1. What is a swap?

3.4.4.2. Interest rate swaps

3.4.4.3. Currency swaps

3.4.4.4. Credit default swaps

3.5. Derivatives: Underlying variables

3.6. Execution of derivatives.

3.6.1. Physical or cash settlement

3.6.2. Choosing the method of settlement

3.7. EU regulation and derivatives

3.7.1. A need for new regulation in the European Union

3.7.2. Latest regulation in the financial sector

3.7.3. Relationship of VAT with other legislation

Chapter 4: Legislative Practice in European Countries

4.1. Introduction

4.2. The United Kingdom

4.2.1. Introduction to the UK VAT system

4.2.2. UK financial derivatives

4.2.3. UK commodity derivatives

4.2.4. UK black box scheme

4.3. Other European countries

4.3.1. Diversity of interpretations in the European Union

4.3.2. VAT treatment: Determining factors

4.3.3. Role of derivatives as financial services

4.3.4. Treatment of commodity derivatives

4.3.5. Swaps: Single or several supplies?

4.3.6. Options and premium paid

4.4. Conclusions

Chapter 5: Derivative Contracts as Objects of Supplies under VAT

5.1. Introduction

5.2. Supplies of goods and services under the VAT Directive

5.2.1. Definition of goods and services

5.2.2. The objective nature of supplies

5.2.3. The role of contracts and the scope of VAT

5.2.4. Similarities in respect of derivatives and other contracts

5.3. Special questions concerning some derivatives as contracts

5.3.1. Special characteristics of swap contracts

5.3.1.1. Analysing swap contracts from a VAT perspective

5.3.1.2. Transfer of principal amounts

5.3.2. Derivative contracts in the context of VAT

5.3.2.1. Substance over form in terms of derivatives as contracts

5.3.2.2. Transfer of a derivative contract as a supply under VAT

5.3.2.3. Arranging, amending and terminating a derivative contract

5.4. Conclusions

Chapter 6: Underlying Assets as Objects of Supplies

6.1. Introduction

6.2. Supplies of underlying assets based on VAT legislation.

6.2.1. Legislation and case law in place

6.2.2. General remarks on the development of EU law in terms of the definition of derivatives under VAT

6.2.2.1. Commodity derivatives as financial instruments based on MiFID II

6.2.2.2. Attempts to amend the VAT Directive in respect of derivatives

6.3. Financial and commodity derivatives

6.3.1. The problem of designating the supplier

6.3.2. Financial derivatives

6.3.3. Commodity derivatives

6.3.3.1. Physical settlement of commodity derivatives

6.3.3.1.1. Impact of physical settlement on VAT

6.3.3.1.2. Allocated and unallocated contracts

6.3.3.1.3. Commodity options and the tax treatment of premiums

6.3.3.1.4. Impact of payment netting on commodity derivatives

6.3.3.1.5. Suspension mechanism

6.3.3.2. Cash settlement of commodity derivatives

6.4. Other transactions based on derivatives

6.4.1. Margins and collaterals

6.4.2. VAT treatment of deposits

6.5. Conclusions

Chapter 7: Derivatives as Financial or Insurance Services

7.1. Introduction

7.2. Insurance services

7.2.1. Introduction

7.2.2. Exempt insurance services

7.2.3. CDSs - An insurance service?

7.2.4. Conclusions

7.3. Credit guarantees and other securities for money

7.3.1. Introduction

7.3.2. CDS - A credit guarantee?

7.3.3. Conclusions

7.4. Payments, transfers, debts, cheques and other negotiable instruments

7.4.1. Introduction

7.4.2. Derivatives as exempt payments or debts

7.4.3. Derivatives as exempt negotiable instruments

7.4.4. Conclusions

7.5. Currency, bank notes and coins used as legal tender

7.5.1. Introduction

7.5.2. The role of money in the context of VAT

7.5.3. Legal tender and reciprocal transactions

7.5.4. Currency derivatives

7.5.5. Conclusions

7.6. Securities

7.6.1. Introduction.

7.6.2. The definition of securities

7.6.2.1. Securities in terms of private law

7.6.2.2. Securities in terms of law of finance

7.6.2.3. Securities and ECJ case law

7.6.3. Derivatives as securities

7.6.3.1. Derivatives as negotiable instruments

7.6.3.2. Philosophy of ECJ case law

7.6.4. Article 9 of the Implementing Regulation

7.6.4.1. Financial options

7.6.4.2. Option as securities

7.6.4.3. Other options in terms of the Implementing Regulation

7.6.5. Conclusions

7.7. Gambling

7.7.1. Introduction

7.7.2. Principle of neutrality in gambling services

7.7.3. CFDs as a form of gambling

7.7.4. Gambling and derivatives

7.7.5. Decisive differences between gambling and derivatives

7.7.6. Conclusions

Chapter 8: Consideration, Taxable Amount and Chargeable Event

8.1. Introduction

8.2. Consideration and taxable amount

8.2.1. Consideration

8.2.1.1. Consideration as compensation for a supply

8.2.1.2. Benefit gained

8.2.2. Taxable amount

8.2.3. Consideration and a taxable amount in terms of derivatives

8.2.3.1. Introduction

8.2.3.2. Financial futures, forwards and swaps

8.2.3.3. Netting off in commodity derivatives

8.2.3.4. Damages paid to the contracting party

8.2.3.5. Consideration of the derivative contract as that of an option

8.3. Chargeable event

8.3.1. Regulation under the VAT Directive

8.3.1.1. Introduction

8.3.1.2. Futures and forwards

8.3.1.3. Swaps

8.3.1.4. Options

8.4. Conclusions

Chapter 9: Taxable Person Carrying out Economic Activity

9.1. Introduction

9.2. Building blocks of economic activity

9.2.1. Supplier as "any person in any place"

9.2.2. Independent activity

9.2.3. Exploitation of tangible or intangible property to obtain income

9.2.4. One taxable person, one economic activity?.

9.2.5. The role of different types of assets

9.2.5.1. Significance of the asset type in economic activity

9.2.5.2. Securities as part of economic activity

9.3. Derivative trader as a taxable person

9.3.1. Who is a taxable person?

9.3.2. The purpose of trading

9.3.3. Incidental transactions and economic activity

9.3.3.1. Incidental transactions in the context of the VAT Directive

9.3.3.2. Direct, permanent and necessary extension of economic activity

9.3.3.3. Hedging, speculating and incidental transactions

9.3.3.3.1. Hedging

9.3.3.3.2. Speculation

9.4. Conclusions

Chapter 10: Final Remarks

10.1. Principal findings

10.1.1. General findings of the study

10.1.2. Derivatives as objects of supplies

10.1.3. Underlying assets as objects of supplies

10.1.4. Derivatives as insurance or financial services

10.1.5. Consideration, taxable amount and chargeable event

10.1.6. Economic activity in the context of derivative trading

10.2. Closing words

Annex I

Annex II

Bibliography

Other Titles in the IBFD Doctoral Series.

Notes:

Description based on print version record.

Description based on publisher supplied metadata and other sources.

ISBN:

90-8722-636-5

OCLC:

1202470748