The European Commission released its annual “VAT Gap Report”. The VAT GAP is the overall difference between the expected VAT revenue and the amount actually collected. In 2018, the VAT Gap in the EU was €140 billion, equating to a total revenue loss across the EU of 11% (down from 11.5% in 2017).
This year’s report also forecasts a potential increase of VAT revenue losses in 2020 due to the effects of the coronavirus pandemic on the global economy. The loss is forecast to be €164 billion in 2020. The VAT Gap is caused by multiple factors including fraud, avoidance, bankruptcies, insolvencies and the overall performance of tax administrations