- Overall Tax Gap & Fraud Response: The European Commission’s “Mind The Gap” report reveals over EUR 100 billion in annual tax revenue losses across the EU, emphasizing tax gaps. It notes that while Eurofisc effectively identifies cross-border VAT fraud, national administrative measures are often too slow to invalidate VAT numbers and stop fraudulent transactions.
- VAT Compliance and Policy Gaps: In 2023, the EU’s VAT compliance gap, the difference between potential and collected VAT, stood at an estimated EUR 128 billion (9.5% of GDP), having increased recently. The VAT policy gap, resulting from reduced rates and exemptions, was estimated at EUR 1.4 trillion, with differentiation and national exemptions accounting for roughly EUR 650 billion.
- Improving Collection & Future Initiatives: The report suggests improving tax collection through better-maintained VAT databases for quicker data analysis and compliance checks. The upcoming ViDA initiative is expected to introduce digital reporting and e-invoicing, paving the way for pre-filled VAT returns, a feature currently offered by only seven Member States.
Source Cesar Atroshy
Latest Posts in "European Union"
- ECJ C-796/23 (Česká síť) – Judgment – Managing partner not liable for other partners’ independently provided service VAT
- ECJ C-121/24 (Vaniz) – Judgment – Joint VAT liability valid post-debtor dissolution if third-party knowledge exists
- Comments on GC T-646/24: Simplification measure for triangular transactions applicable to fourth link in the chain
- VAT Applies to Retailer’s Tax-Free Refund Processing Fees: No Exemption, Fee Treated as Gross Price
- CJEU Confirms Triangulation VAT Relief Applies to Four-Party Chains, Even with Direct Customer Delivery
