EU VAT Tax Gaps 2023: Compliance, Policy Gaps, and Member State Comparisons

• The European Commission’s 2023 ‘Mind the Gap’ report analyzes tax gaps in the EU, focusing on VAT and Corporate Income Tax.
• The VAT compliance gap in the EU was €89 billion in 2022, estimated at 9.5% of total VAT liability (€128 billion), ranging from 1% (Austria) to 30% (Romania) across Member States.
• The policy gap, mainly due to reduced rates and exemptions, stands at 50.5%, with Spain and Greece having the highest levels.
• Between 2022 and 2023, the VAT compliance gap increased in 17 Member States and decreased in 9, with the largest increases in Ireland, Estonia, Hungary, and Poland.
• Digital compliance tools and enhanced EU cooperation are recommended to reduce tax gaps.

Source: innovatetax.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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