Romania Maintains Highest VAT Gap in the EU, with Unpaid Sum Equivalent to Half of 2021 Budget Deficit

• Romania has the highest VAT gap in the European Union.
• The VAT deficit in Romania is estimated at 36.7% in 2021, slightly lower than 37.3% in 2020.
• Romania’s losses from VAT amount to 9 billion euros in 2021, compared to 7.9 billion euros in 2020.
• The VAT deficit represents the losses incurred by the state budgets due to various reasons such as evasion, fraud, insolvency, bankruptcy, and administrative errors.
• Romania’s VAT deficit is the largest in the EU, with the second-ranked country having a gap 10 percentage points smaller.
• The implementation of programs such as e-invoicing, electronic cash registers, and SAF-T is expected to help improve VAT collection in the future.
• Despite favorable conditions for improving compliance, Romania’s VAT gap remains high.
• The Netherlands, Finland, and Spain have the lowest VAT deficits, while Romania, Malta, Greece, and Lithuania have the highest.
• The VAT gap is calculated as the difference between the projected VAT revenues and the actual revenues collected by the state budgets in EU member states.

Source: blog.pwc.ro

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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