- The EU VAT Gap 2024 report provides a detailed analysis of VAT compliance and policy gaps in the EU
- Oxford Economics analyzed the difference between theoretical VAT liability and actual revenue, highlighting compliance inefficiencies and policy-related revenue losses
- VAT is a crucial tax on goods and services in the EU, significant for government financing and stability
- In 2023, VAT made up 7.2% of EU GDP and 15.7% of total government revenue
- Economic shifts due to the Covid pandemic, inflation, and the Russian-Ukrainian war influenced VAT revenues and policies
- The VAT compliance gap in the EU was 7% of the theoretical total in 2022, representing €89.3 billion in uncollected revenue
- Digital transactions have improved VAT compliance by reducing cash-based tax evasion, though e-commerce poses collection challenges
- The services and tourism sectors are more prone to VAT non-compliance due to their diverse and intangible nature
- Success stories from Central and Eastern Europe show progress in reducing VAT compliance gaps, influenced by the pandemic
- Oxford Economics helped the EU Commission present these findings through infographics and an interactive microsite
Source: oxfordeconomics.com
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.
