CASE’s New Report: Countries with the Largest and Smallest VAT GAP
The aim of this study is to quantify the VAT Gap and to better understand trends in the EU in the field of VAT collection.
During 2015, the overall VAT that should have been collected in EU Member States grew by about 4.2 %, while collected VAT revenues rose by 5.8 %. As a result, the overall VAT Gap in the EU Member States decreased by about €8.7 billion in absolute terms, down to €151.5 billion. As a percentage, the overall VAT Gap decreased by 2.1 % to 12.7 %. In 2015, the highest VAT Gap was recorded in Romania with a figure of 37.18 % in Romania. In absolute terms, the highest VAT Gap of €35 billion was in Italy. Overall, the VAT Gap decreased in most Member States, with the largest improvements noted in Malta, Romania and Spain. Seven Member States saw a small increase in their VAT Gaps: Belgium, Denmark, Ireland, Greece, Luxembourg, Finland and the UK.
The VAT Gap measured in this study includes for the first time revenues emerging from new VAT rules for cross-border sales of e-services which came into force on 1 January 2015.
The report was prepared for the European Commission. CASE's team was led by Grzegorz Poniatowski, Director of Fiscal Policy Studies, and composed of Mikhail Bonch-Osmolovskiy and Misha Belkindas.
Photo: Flickr, GotCredit, CC BY 2.0
