VAT design and energy trade: the case of Russia and Ukraine.(value-added tax)

Russia is single of the world's largest potency producers and the largest husbandman in the Commonwealth of Independent States (CIS). (1) It benefits from the application of value-added tax (VAT) upon oil and gas exports to other CIS countries based upon the origin principle. Much of Russia's force exports within the CIS are purchased by the agency of Ukraine. While oil and gas imports from Russia are except from Ukrainian VAT, Ukraine does not provide a VAT credit to importers who have paid Russian VAT; thus, these imports are effectively taxed twice. (2)

Although the Ukrainian authorities