School of Law

Research Student: Yige Zu

Developing a Practicable Benchmark VAT

My doctoral research develops a benchmark VAT that bridges the gap between theory and practice in VAT design and provides concrete guidance for countries to evaluate, assess, and, where appropriate, reform their own VATs.

Experience has shown that real-world VATs most often deviate substantially from the theoretical VAT model, revealing the disconnect between the theoretical model based primarily on economic criteria and actual VAT designs that recognise the administrative, political and economic constraints encountered in the real world. A single rate and broad-based VAT is not readily achievable in many countries and VAT designers are faced with issues such as the application of VAT to small businesses, financial supplies, low value imports, and cross-border services as well as devising workable arrangements for VAT systems in a federal or economic community setting, which are not addressed directly in the model.

Drawing on both theory and experience, this thesis develops a practicable benchmark VAT that balances four main objectives, namely, maximisation of revenue potential, minimisation of administrative and compliance costs, legal certainty and economic neutrality. The proposed model takes into account commonly confronted political and administrative constraints to provide a more realistic template that can be used by countries to assess and reform their VATs. The operation of the practicable benchmark is illustrated by means of a case study based on the Chinese VAT, a tax that is at odds with the theoretical model in many respects.


I obtained an LLM with Distinction in European Trade and Commercial Law from Durham University in 2014. I enrolled as a PhD candidate at Durham University in October 2015, and followed my principal supervisor to the University of Leeds in March 2016. I was a visiting researcher at the Université catholique de Louvain (Belgium) in the first half of 2017.


Journal Articles

Y. Zu, “VAT Thresholds and Small Businesses: Where to Draw the Line?” (2018) Canadian Tax Journal, forthcoming.

Y. Zu, “Reforming VAT Concessions: A Tax Expenditure Analysis” [2017] British Tax Review 418-437. 

Y. Zu and R. Krever, “GST Cash and Accrual Mismatches: Avoiding the Avoidance” (2017) 46 (4)Australian Tax Review 271-283.

Y. Zu, “China’s VAT on Exports: The Glacial Shift from a Heavy Hand to the Invisible Hand” (2017) 88 (8)Tax Notes International 767-777.

Conference Papers and Presentations

09/2017: ‘VAT Thresholds and Small Businesses: Where to Draw the Line?’, Oxford University Centre for Business Taxation Doctoral Conference 2017, University of Oxford, UK

09/2017: ‘An Ideal VAT for China’, EANOVAT PhD Seminar on Indirect Taxes, Lund University, Sweden

06/2017: Poster Programme, European Association of Tax Law Professors (EATLP) 2017 Annual Congress, University of Lodz, Poland

09/2016: ‘Interpreting the VAT: Can the Law be Made Judge-proof?’, The Society of Legal Scholars (SLS) 2016 Annual Conference, University of Oxford, UK

12/2014: ‘VAT Rate Structure in China: Implications of the EU Experience’, The International Conference of Chinese Tax and Policy, Xiamen University, China

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