• Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 9/20/2013

EU - Report evaluating revenue lost in “VAT gap” 

September 20: The European Commission this week announced that a new study confirms billions of euros are lost in the value added tax (VAT) gap.

The “VAT gap” is the difference between the expected VAT revenue and VAT actually collected by national authorities.

According to an EC release, an estimated €193 billion in VAT revenues was lost due to non-compliance or non-collection in 2011.

The study is part of the EC efforts to reform the VAT system in Europe and to address tax evasion. The study sets out detailed data on the gap between the amount of VAT due, the amount actually collected in 26 EU Member States between 2000-2011, and the main factors contributing to the VAT gap.

The EC recommended that EU Member States broaden their national tax bases and limit tax exemptions and reductions.

Read a list of “frequently asked questions” on the VAT gap.

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