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. 


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.