A proposed digital framework for VAT administration
Two VAT Values,
Kept Independently
2VIT records advance-funded VAT value as VIAT and authorised deferred VAT exposure as VIDT. They may travel in one traceable token, but they remain legally and mathematically separate and can never conceal one another through netting.
The problem and the response
VAT relief without making deferred tax invisible
Zero-rated businesses can be forced to finance VAT on inputs while waiting for credits or refunds. 2VIT proposes controlled deferment for approved businesses and their approved supply chains, while keeping Revenue's deferred claim visible, limited and auditable.
Protect cash flow
Eligible DB businesses may choose VIDT where deferment is commercially useful, within their approved Wallet Maximum.
Protect Revenue
VIDT remains identifiable exposure, while VIAT becomes tax payment only when authenticated and permanently retired.
Preserve choice
DB status permits deferment but never compels it: a buyer may request full VIAT, a mixed token or permitted VIDT.
Current settled direction
The framework now rests on a small set of controlling rules
VIAT perimeter
B2B, B2DB and DB2B are VIAT-only. VIDT may pass domestically only from DB to DB through a recipient-controlled bucket.
No RHP
There is no automatic age-based Reasonable Holding Period. WM, Periodic Limits, lineage and reconciliation provide the controls.
Wallet Maximum
Active plus reserved VIDT cannot exceed WM. Available capacity is a legal ceiling, not an entitlement or target.
Existing-VIAT priority
Eligible VIAT already held is used before VIDT or newly sanctioned value when an outgoing token is assembled.
Wallet-wide LPR
The fixed Local-Sale Purge Ratio uses aggregate DB2C output VAT and eligible active VIDT—without periodic stock valuation or GP allocation.
Separate end events
VIAT is surrendered and retired. VIDT is transferred, settled or purged. Neither coordinate is internally converted into the other.
Development map
The complete proposed guide
Available pages form the current documented framework. Planned pages identify the work still needed before a consolidated legal and technical specification can be completed.
Foundations
Purpose, terminology, mathematical form and the controlling non-netting rules.
Introduction
Why 2VIT is proposed, how VIAT and VIDT differ, and how the complete framework fits together.
Read guide →Core Definitions
Controlling meanings for actors, coordinates, wallets, limits, buckets, settlement and purge.
Read guide →Dual-Coordinate Token
The A+iD representation, L1 VAT value, route constraints, conservation, residue and system invariants.
Read guide →Transactions and Wallets
Actor routes, token states, Wallet Maximum controls and automated transaction handling.
Actors and Supply Matrix
B2B, B2DB, DB2DB, DB2B, B2C and DB2C treatment in one route-based matrix.
Read guide →Token Lifecycle and Token Management
Origination, activation, selection, division, amalgamation, residue, retirement, purge and lineage.
Read guide →Wallet Maximum and Periodic Limits
How authorised VIDT exposure and new coordinate creation are limited without an age-based RHP.
Read guide →Automated Wallet Rules and Transaction Buckets
Buyer choice, reservations, VIAT priority, capacity validation, private advice and atomic commitment.
Read guide →Payment, Returns, Settlement and Refunds
Output-VAT payment, VIAT surrender, VIDT settlement, taxable-period reconciliation and restricted refunds.
View planned scope →Cross-Border and Special Treatments
Rules that need treatment beyond the ordinary domestic supply matrix.
Imports, Exports and Re-exports
Customs events, zero-rated supply chains, export purge, verified refunds and the re-export route.
View planned scope →Capital Goods and Special Stock
Capital goods, temporary and seasonal stock, stock surges, work in progress and long-production cycles.
View planned scope →Non-Tradables
Inputs and transactions that must not create freely transferable token value.
View planned scope →Multiple VAT Rates and Adjustments
Rate-lineage controls, apportionment, exemptions, credit notes and changes in tax treatment.
View planned scope →Compliance, Governance and Law
Eligibility, controls, corrections, taxpayer safeguards and the statutory framework.
DB Approval, Governance and Exit
Voluntary entry, eligibility, WM review, suspension, withdrawal, status changes and orderly exit.
View planned scope →Fraud Prevention, Data, Monitoring and Audit
Circular trading, missing traders, false invoices, risk signals, audit evidence and performance measures.
View planned scope →Journal Tokens, Corrections and Disputes
Immutable correction events, rejected transactions, notices, objections, reviews and appeals.
View planned scope →Legal Overview
Statutory recognition, Revenue powers, taxpayer rights, evidence, privacy and delegated rule-making.
View planned scope →Technology and Delivery
System architecture, staged testing, transition and the consolidated specification.
Technical Overview
Ledgers, services, identity, security, interoperability, privacy and operational resilience.
View planned scope →Implementation, Pilot and Simulation
Population simulation, anomaly injection, pilot stages, evaluation measures and transition safeguards.
View planned scope →Full Technical Specification
Consolidated rules, schemas, event codes, state machines, algorithms, APIs, tests and invariants.
View planned scope →Wider Application
Potential public-revenue and trade-control benefits beyond core VAT administration.
Extended Benefits of 2VIT
A concise view of Foreign-Exchange Import Assurance and linked cross-government controls.
Read guide →Status of the proposal
Designed for evaluation before legislation
2VIT is a developing conceptual, legal and technical framework. It is not an enacted tax system and does not replace the VAT law of any jurisdiction. The present guides are intended for structured criticism, economic simulation, legal drafting, prototype development and a carefully measured pilot before any wider adoption.