EU Member States Lose €61 Billion in VAT Revenue in 2021, Reveals EC Report

• EU Member States lost €61 billion in VAT payments in 2021
• VAT gap was mainly due to fraud, evasion, and filing mistakes
• Romania had the highest VAT gap at 36.7%, while Malta had 27%
• EU countries missed out on an average of 5.3% of expected VAT
• Hungary, Italy, and Spain improved VAT collection through digital reporting requirements
• These requirements were expensive for companies and required new accounting systems
• Some question the effectiveness of these measures on fraudulent businesses
• Poland and Hungary have made significant improvements in reducing their VAT gaps
• Finland only missed out on 0.4% of expected VAT, while the Netherlands collected 0.2% more
• The EU VAT gap has halved from €140 billion in 2019 to €61 billion in 2021, largely due to Covid
• Electronic payments and online shopping have higher VAT compliance rates
• The European Public Prosecutor’s Office has increased efforts to combat cross-border VAT fraud
• Concerns have been raised about the EPPO’s approach to investigating Big Tech companies
• The European Commission’s VAT in the Digital Age proposals are under discussion
• Implementing these proposals is unlikely before 2030.

Source: brusselssignal.eu

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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