- The EU’s VAT compliance gap rose sharply in 2023, reaching EUR 128 billion (9.5% of total VAT liability), reversing years of improvement.
- The gap varies widely across Member States, from 1% in Austria to 30% in Romania, with most countries below 10%.
- Increases in VAT non-compliance outnumbered improvements in 2023, with Ireland, Estonia, Hungary, and Poland seeing the largest deteriorations.
- Digitalisation, especially e-invoicing and cashless payments, is linked to lower VAT evasion, but gains were partly reversed post-pandemic as some countries returned to cash.
- Complementary measures like limits on cash transactions, stricter penalties, and expanded reporting for payment service providers are also highlighted as important for improving compliance.
Source: sharedserviceslink.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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