- EU Member States made significant progress in VAT compliance between 2018 and 2022
- VAT fraud, evasion, and other factors led to approximately €89 billion in lost revenues in 2022
- Targeted policies such as digitalizing tax systems and real-time reporting have been effective in reducing the compliance gap
- Ongoing reforms are needed to further close the gap and combat fraud
- The Council approved the VAT in the Digital Age proposal to address cross-border VAT fraud
- MTIC fraud within the EU caused annual losses of €13-33 billion between 2010 and 2023
- The report also highlights the “actionable VAT policy gap” related to reduced rates and exemptions
- In 2022, the EU VAT compliance gap was €89.3 billion, representing 7% of expected revenues
- VAT is crucial for EU and Member State budgets, with the gap calculated based on national consumption data and VAT Total Tax Liability
Source: tra.org
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.
