Brussels, 23/10/2014 (Agence Europe) - The sum of €177 billion in revenue from value-added tax (VAT) was lost in 2012, as a result either of non-compliance or of non-recovery, the latest study on the VAT Gap, which was published by the European Commission on Thursday 23 October, reveals.
This figure, which represents the difference between the amount of VAT due and the amount collected, equates to 16% of all VAT revenue expected for 26 countries of the EU (as Cyprus and Croatia were not covered).
VAT revenue grew by just over 2% between 2011 and 2012 in the 26 countries examined, rising from €904 billion to €922 billion. The gap between the VAT due and the VAT actually collected rose by €6 billion over these two years. The smallest gap was to be seen in Finland and the Netherlands (5%), followed by Luxembourg (6%). The largest gaps were observed in Romania (44%), Slovakia (39%), Lithuania (36%), Latvia (34%) and Greece and Italy (33%), although Greece improved its performance the most (reducing the gap from €9.1 to €6.6 billion). In total, the gap is down in eleven countries and up in seven, remaining constant in the other eight.
The VAT Gap is due, amongst other things, to tax fraud and tax evasion, but can also be caused by bankruptcy, financial insolvency and miscalculations. (EL)