undefined
Skip to main content
Hong Kong SAR China|en-HK

Add a bookmark to get started

Global Site
Africa
MoroccoEnglish
South AfricaEnglish
Asia Pacific
AustraliaEnglish
Hong Kong SAR ChinaEnglish简体中文
KoreaEnglish
New ZealandEnglish
SingaporeEnglish
ThailandEnglish
Europe
BelgiumEnglish
Czech RepublicEnglish
HungaryEnglish
IrelandEnglish
LuxembourgEnglish
NetherlandsEnglish
PolandEnglish
PortugalEnglish
RomaniaEnglish
Slovak RepublicEnglish
United KingdomEnglish
Middle East
BahrainEnglish
QatarEnglish
North America
Puerto RicoEnglish
United StatesEnglish
OtherForMigration
7 November 20232 minute read

2023 Report on the VAT Gap released

European Union

The European Commission recently released its 2023 VAT Gap Report, which has exposed remarkable strides in Value-Added Tax (VAT) compliance across EU Member States in the year 2021.

The 2023 VAT Gap report shows that there has been a substantial reduction in the collective VAT revenue losses, plummeting from EUR99 billion in 2020 to EUR61 billion in 2021. These losses are acknowledged to be the result of various factors including VAT fraud, evasion, avoidance, non-fraudulent bankruptcies, miscalculations, and financial insolvencies.

The report outlines that targeted policy measures such as the digitisation of tax systems, real-time transaction reporting, and the adoption of e-invoicing had a significant impact on this positive change.

This is not to mention that temporary government support initiatives, often tied to tax payments, that were rolled out during the COVID-19 pandemic, have also played a pivotal role.

The collective VAT Gap reduction, totalling EUR38 billion across the EU was quite remarkable in some Member States, like Italy, which saw a 10,7% and Poland a 7,8% reduction, in their respective national VAT Gap figures.

The Netherlands, Finland, Spain, and Estonia reported the smallest gaps, primarily owing to their pre-existing low levels of non-compliance, although statistical and measurement inconsistencies may have played a part.

 

Key takeaway

This report represents a ground-breaking development in the EUs pursuit of minimising VAT revenue losses and enhancing compliance, promising far-reaching implications for the European Union.