EU: VAT gap statistics for 2021

The “VAT gap” dropped by approximately €38 billion compared to 2020 figures.

The “VAT gap” dropped by approximately €38 billion compared to 2020 figures.

The European Commission (EC) today issued a release reporting the value added tax (VAT) gap statistics for 2021.

According to the EC release, EU member states lost an estimated €61 billion in VAT revenues in 2021 due to VAT fraud, evasion and avoidance, non-fraudulent bankruptcies, miscalculations, and financial insolvencies. The “VAT gap”—an estimate of the overall difference between the expected theoretical VAT revenue and the amount actually collected—dropped by approximately €38 billion compared to 2020 figures.

The latest report shows that targeted policy responses made a difference, particularly those related to digitalisation of tax systems, real-time reporting of transactions, and e-invoicing. Temporary factors such as government support measures implemented during the coronavirus (COVID-19) pandemic, which were often contingent on paying taxes, may also have played a role.



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