- EU Member States lost €61 billion in VAT payments in 2021
- VAT gap was mainly due to fraud, evasion, and filing mistakes
- Romania had the highest VAT gap at 36.7%, while Malta had 27%
- EU countries missed out on an average of 5.3% of expected VAT
- Hungary, Italy, and Spain improved VAT collection through digital reporting requirements
- These requirements were expensive for companies and required new accounting systems
- Some question the effectiveness of these measures on fraudulent businesses
- Poland and Hungary have made significant improvements in reducing their VAT gaps
- Finland only missed out on 0.4% of expected VAT, while the Netherlands collected 0.2% more
- The EU VAT gap has halved from €140 billion in 2019 to €61 billion in 2021, largely due to Covid
- Electronic payments and online shopping have higher VAT compliance rates
- The European Public Prosecutor’s Office has increased efforts to combat cross-border VAT fraud
- Concerns have been raised about the EPPO’s approach to investigating Big Tech companies
- The European Commission’s VAT in the Digital Age proposals are under discussion
- Implementing these proposals is unlikely before 2030.
Source: brusselssignal.eu
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.
