- The European Commission has published its latest VAT Gap report, which reveals the difference between the VAT submitted and the VAT collected in each EU country. The gap is primarily caused by tax fraud, with fraudulent invoices being submitted to claim non-existent VAT.
- The VAT gap estimates are important for understanding lost VAT revenue and improving tax administration.
- Many European Member States have significant VAT gaps, which have a major impact on national budgets.
- Efforts are being made to close these gaps through various measures, including electronic invoicing.
- The report for 2021 shows a notable decrease in the overall VAT gap compared to previous years
- Italy and Poland have made significant progress in reducing their gaps.
- The Netherlands, Finland, Spain, and Estonia have the smallest gaps, with the Netherlands even having a negative value due to low non-compliance.
- France, Germany, Italy, the Netherlands, Poland, and Spain have contributed the most to reducing the EU’s overall VAT gap.
- Countries are implementing measures such as mandatory electronic invoicing to decrease their gaps. Electronic invoicing helps reduce errors and inconsistencies compared to paper invoices.
Source Unifiedpost
Latest Posts in "European Union"
- CJEU Confirms TP Adjustments as VAT-Applicable Services, Requires Supporting Documentation
- Court of Justice Rules on VAT for Intra-Group Services and Evidence Requirements for Deductions
- ECJ Rules Compensation Payments in Transfer Pricing as Taxable Supply for VAT Purposes
- ECJ Rules Non-Transactional Profit Adjustments by Principal Are VAT-Applicable Services in Arcomet Case
- Understanding VAT Implications on Transfer Pricing: Insights from Arcomet Case C-726/23
