- The European Commission has released the VAT Gap Report 2023, which assesses the difference between expected and actual VAT revenue in EU Member States.
- The latest report shows that most Member States made progress in enforcing VAT compliance in 2021, resulting in a decrease in the overall EU VAT Gap by €38 billion compared to 2020.
- The reduction in the VAT Gap can be attributed to targeted policy responses, such as digitalisation of tax systems and real-time reporting of transactions, as well as temporary factors such as COVID-19 government support measures.
- The new report highlights the negative impact of lost VAT revenues on public goods and services such as schools, hospitals, and transport.
- The Commission has proposed a move to a cross-border digital reporting system based on e-invoicing for business-to-business transactions as part of the 2022 VAT in the Digital Age proposals.
Source Orbitax
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