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(10 September 2020) - EU countries lost an estimated €140 billion in Value-Added Tax (VAT) revenues in 2018, according to a new report released by the European Commission today.

VAT
© Mohamed Hassan

Though still extremely high, the overall ‘VAT Gap' – or the difference between expected revenues in EU Member States and the revenues actually collected – has improved marginally in recent years.

However, figures for 2020 forecast a reversal of this trend, with a potential loss of €164 billion in 2020 due to the effects of the coronavirus pandemic on the economy.

As in 2017, Romania recorded the highest national VAT Gap with 33.8% of VAT revenues going missing in 2018, followed by Greece (30.1%) and Lithuania (25.9%).

The smallest gaps were in Sweden (0.7%), Croatia (3.5%), and Finland (3.6%).

In absolute terms, the highest VAT Gaps were recorded in Italy (€35.4 billion), the United Kingdom (€23.5 billion) and Germany (€22 billion).

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