Rita de la Feria (Universities of Leeds & Lisbon)

<p>After thinking if I could invite anyone in the world for an interview, Rita de la Feria was on the top of the list. She is among Top50 of the most influential tax people in the world by the International Tax Review magazine. So, I did not believe my eyes after I saw her reply: „To be completely honest with you, I have been refusing all similar requests.. Having said this, I would like to do this for you.“ And the hour chat with Rita turned out to be not only educating, pleasant and sometimes even fun (did you know that <i>Star Wars Episode I</i> opens by saying that there is a dispute on taxation of trade routes), but one of the most interesting hours spent in my professional career. We spoke about the Minority Report movie as well, BTW. </p><p><i>On the current system</i></p><p>If one push personal income tax too high, people will stop working. If you push too much on corporate tax, companies will invest in another country. Rita beautifully explains here why VAT is the best tax, if well designed – it should not intervene in the business. In reality VAT systems are often messed up, also in the EU, but it is still the best tax we’ll have also in the future. Special taxes on digital economy most likely are going nowhere. BEPS and other anti-avoidance rules have a short life span, because very good tax lawyers find a way, are always a step ahead of policy makers. Of course, actions that were ok 7-10 years ago are not ok anymore, but mainly for reputation purposes. Companies still have incentives to move in order to pay less taxes, so one has to eliminate the incentives, instead of the anti-avoidance rules. </p><p><i>On the future</i></p><p>So, where the tax systems will go? Most likely after the pandemic the desperation of countries for investments will be even bigger, so tax competition will increase. So, the digital unilateral taxes are unfortunately here to stay. Ritas’ vision of a corporate system is to tax profits based on where the customer is, like it is applied for VAT. It would prevent tax competition as