EU countries lose €152 billion in the VAT Gap

Oct 02, 2017

EU countries lost an estimated total of €152 billion in VAT revenues in 2015, according to a new study by the European Commission. While the collection of VAT revenues shows some signs of improvement, the missing amounts remain high. The report comes just ahead of the European Commission’s proposals to overhaul the VAT system that are due to be released in October.

The 'VAT Gap' is the overall difference between the expected VAT revenue and the amount actually collected. The report states that the average EU figures are improving, but individual VAT collection performances vary significantly amongst Member States. The largest VAT Gaps were reported in Romania (37.2 percent), Slovakia (29.4 percent) and Greece (28.3 percent). The smallest gaps were observed in Spain (3.5 percent) and Croatia (3.9 percent). In absolute terms, the highest VAT Gap of €35 billion was in Italy. Seven Member States, including Ireland and the UK saw small increases in the VAT Gap.