Sharp Decrease in “VAT Gap” in Europe – 2023 EU Commission Report

• VAT Gap in Europe has decreased significantly due to measures implemented to combat VAT fraud
• VAT Gap decreased from 146 billion euros in 2017 to 61 billion euros in 2021, representing 5.3% of total VAT revenue
• Most significant decrease in VAT Gap was from 2020 to 2021, showing effectiveness of anti-fraud systems
• Variation in VAT Gap reduction among EU member states, with most countries seeing a decrease
• Netherlands, Finland, and Spain are top performers with VAT Gap representing less than 1% of total VAT revenue
• Romania and Malta are lagging behind in VAT Gap reduction due to ineffective tax controls
• Hungary and Poland have made significant progress in reducing VAT Gap through effective measures
• France has the second highest VAT Gap at 9.5 billion euros in 2021, but it only represents 4.9% of total VAT revenue
• Factors contributing to VAT Gap include tax fraud, evasion, errors, and insolvency, but measures have led to improvement in EU VAT Gap
• Implementation of new reporting methods has played a key role in reducing VAT Gap and combating tax fraud.

Source: easytax.co

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.

---

---