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Applying VAT to loan-deposit intermediation

Author

Listed:
  • Guillermo Peña

    (Department of Economic Analysis and IEDIS, Universidad de Zaragoza, Zaragoza, Spain)

Abstract

Technical difficulties associated with transaction-by-transaction taxation methods have led financial services to be exempt in most countries. Methods applying the value added tax to financial services attempt to address this issue. This paper expands existing knowledge by integrating these methods into a single, unique formulation. A unified framework for generalising and characterising these approaches is presented, facilitating a new classification based on either shadow or implicit prices. Furthermore, two new variants of the mobile-ratio method for individual transactions, utilising either shadow prices or “explicit-made†implicit prices, are derived. These variants improve and address critiques from previous methods.

Suggested Citation

  • Guillermo Peña, 2026. "Applying VAT to loan-deposit intermediation," Public Sector Economics, Institute of Public Finance, vol. 50(3), pages 431-460.
    • Handle: RePEc:ipf:psejou:v:50:y:2026:i:3:p:431-460
    DOI: 10.3326/pse.50.3.5
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    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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