EU’s 2023 VAT Gap Report: Significant Reduction in Revenue Losses and Improved Compliance

• The European Commission released its 2023 VAT Gap Report
• The report shows a substantial reduction in collective VAT revenue losses from EUR99 billion in 2020 to EUR61 billion in 2021
• Factors contributing to these losses include VAT fraud, evasion, avoidance, bankruptcies, miscalculations, and insolvencies
• Targeted policy measures such as digitization of tax systems, real-time transaction reporting, and e-invoicing had a significant impact on reducing the VAT Gap
• Government support initiatives during the COVID-19 pandemic also played a role
• Some Member States, like Italy and Poland, saw significant reductions in their national VAT Gap figures
• The Netherlands, Finland, Spain, and Estonia reported the smallest gaps due to low levels of non-compliance
• The report is a groundbreaking development in the EU’s efforts to minimize VAT revenue losses and improve compliance.

Source: dlapiper.com

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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