European Commission - Press release

Commission presses Member States on VAT revenue collection

Brussels, 4 September 2015
VAT revenue collection has failed to show significant improvement across EU Member States
according to the latest figures released by the European Commission today.
VAT revenue collection has failed to show significant improvement across EU Member States according
to the latest figures released by the European Commission today.
Based on VAT collection figures from 2013, the overall difference between the expected VAT revenue
and the amount actually collected (the so-called "VAT Gap") did not improve on 2012. While 15
Member States including Latvia, Malta and Slovakia saw an improvement in their figures, 11 Member
States such as Estonia and Poland saw deterioration.
The total amount of VAT lost across the EU is estimated at 168 billion, according to the report. This
equates to 15.2% of revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial
insolvencies and miscalculation in 26 Member States[1].
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said: "This
important study highlights once again the need for further reform in VAT collection systems across the
EU. I urge Member States to take the steps needed to fight tax evasion and tax fraud at all levels. This
remains a burning issue and is at the top of this Commission's agenda."
As well as setting out detailed data on the difference between the amount of VAT due and the amount
actually collected in Member States in 2013, the latest VAT Gap study gives an indication of the
effectiveness of VAT enforcement and compliance measures. The main trends in VAT collection are also
presented, along with an analysis of the impact of the economic climate and policy decisions on VAT
revenues.
In 2013, the estimated VAT gaps of Member States ranged between 4 percent in Finland, the
Netherlands and Sweden to 41 percent in Romania.
Background
The VAT Gap study is funded by the Commission as part of its work to reform the VAT system in
Europe and to clamp down on tax fraud and evasion. The Commission has already identified key
actions and taken a number of measures to assist Member States to this effect.
First, a tougher stance against evasion and stronger enforcement at national level are essential. The
VAT reform launched in December 2011 has already delivered important tools to ensure better
protection against VAT fraud, while the Quick Reaction Mechanism allows Member States to react much
more swiftly and effectively to sudden, large-scale cases of VAT fraud. The Commission also supports
the Eurofisc network in order to strengthen Member States' capacities to fight cross-border fraudulent
networks through the exchange of operational information.
Secondly, the Commission has worked to help simplify tax systems, making it easier for taxpayers to
comply with the rules. For example, measures to facilitate electronic invoicing and special provisions
for small businesses came into force in 2013. Since 1 January 2015, a One Stop Shop enables
businesses providing e-services, broadcasting and telecoms services to file a single VAT return for all
their activities across the EU.
Thirdly, Member States need to reform their national tax systems and modernise their administrations
in order to reduce the VAT Gap. The Commission has set out possible measures to meet these
objectives and, where requested, supports Member States by coordinating technical assistance
activities.
Useful links
The full report is available here.
For more information, see our FAQ.

1. As in previous reports, it was not possible to include estimates for Croatia and Cyprus, due to asyet-incomplete national account statistics for the two countries.
IP/15/5592
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