EU: VAT gap statistics for 2020
The VAT gap decreased by more than €31 billion.
The VAT gap decreased by more than €31 billion.
The European Commission issued a release reporting the value added tax (VAT) gap statistics for 2020.
According to the EC webpage, EU member states lost an estimated €93 billion in VAT revenues in 2020 due to VAT fraud and evasion, VAT avoidance and optimisation practices, bankruptcies and financial insolvencies, as well as miscalculations and administrative errors. The “VAT gap”—the difference between expected revenues in EU member states and the revenues actually collected—dropped by approximately €31 billion compared to 2019 figures. The increase in VAT compliance can be explained to some extent by the effect of government support measures introduced in response to the COVID-19 pandemic, which were contingent on paying taxes.
In nominal terms, the VAT gap decreased by more than €31 billion to €93 billion in 2020.
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