VAT Gap in the EU

Description:

The core objective of this study is to inform in an accurate, timely, understandable, and attractive manner the national administrations, Commission, academic community, and a broader audience on the value, development over time, and difference across Member States of tax gaps and related parameters. More specifically, the study will cover the VAT compliance gap, VAT policy gap, its components, and the C-efficiency. The expected secondary objectives are, among others, to enhance the efforts of national administrations in their own calculation by helping to validate their estimates and by providing quantitative evidence to help assess the effectiveness of the measures introduced at the EU level and by Member States’ administrations.

The set of tasks, components of the analysis, and elements of the presentation envisaged for the 2023 Study, as set out in the ToR, consist of:

• Review of the economic and policy context in 2021 and outlook for 2022, which covers as a minimum:
• Economic conditions, for instance as regards development of GDP, unemployment, consumption, capital formation, and other indicators the tenderer considers influential. In particular, this review shall include the impacts of the coronavirus pandemic;
• VAT regime changes;
• sources of changes in VAT revenue components;
• link and relevance of the analysis for the development and analysis of the VAT compliance and policy gaps.
• Calculation of VAT compliance gap estimates by EU Member State as well as at the EU level.
• Calculation of VAT policy gap estimates and collection efficiency by EU Member State as well as at the EU level.
• Individual country reports.
• Review and reassess the methodological approach developed in the previous edition of the VAT gap study to cope with the unavailability of the weighted average rate calculations. At a minimum, the analysis needs to critically assess the underlying assumptions (for instance, but not limited to, consumption patterns), the extent to which these assumptions can be supported by evidence, and whether the assumptions can be considered valid over time, especially when they refer to patterns or distributions that remain stable or unaltered over time.
• Web front end for visualisation and dissemination.

Experts: Grzegorz Poniatowski, Adam Śmietanka, Mikhail Bonch-Osmolovskiy

Sponsor: Directorate-General Taxation and Customs Union (DG TAXUD)

Project leader: CASE – Center for Social and Economic Research