VATLive > Blog > EU VAT > EU VAT Gap shrinks to €147.1billion - Avalara

EU VAT Gap shrinks to €147.1billion

  • EU VAT
  • 21 September 2018 | Richard Asquith

EU VAT Gap shrinks to €147.1billion

The latest estimate for missing EU VAT from the European Union, the VAT Gap, has shrunk to €147.1 billion in 2016 from €157.7 billion in 2015. This represents a revenue gap of 12.2%. In terms of tax base, the gap has improved from 13.2% of VAT due down to 12.3%.

The VAT Gap is a comparison of expected VAT revenues, based on the size of the economy and tax rates, less actual collections. The gap is cause by a number of factors, including: poor administration; tax debtors going into liquidation, fraud

Overall, the VAT Gap decreased in the majority of Member States. The biggest declines in the VAT Gap—of over five percentage points—occurred in Bulgaria, Latvia, Cyprus, and the Netherlands. Only six countries saw a reversal in the gap: Romania, Finland, the UK, Ireland, Estonia, and France.

Italy now accounts for 24.4% of the total missing EU VAT. Over 25% of its anticipated VAT collections are not collected.

Latest news
Poland delays VAT cut to reform reduced rates
October 22, 2018

Poland’s Ministry of Finance has announced that it will recategorise many supplies to within the current reduced VAT rate category. However, this will mean Poland will not...
Hungary VAT registration threshold HUF 12m Jan 2019
October 17, 2018

Hungary has received permission to introduce an VAT registration threshold for businesses of HUF 12 million from 1 January 2019. This is approximately €48,000, based...
UK MTD pilot goes public; Oct 2019 groups & non-resident delay
October 16, 2018

HMRC announced today that it is opening the test pilot for its Making Tax Digital for VAT programme to the public.  However, HMRC also announced...

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.