The countries of the EU lost out on €147.1 billion in value-added tax (VAT) revenue in 2016, according to a new study published by the European Commission on Friday 21 September.
The overall VAT gap, or the difference between anticipated VAT revenue and the amount actually received, felt slightly compared to 2015, from 13.2% to 12.3%, or a drop of €10.5 billion (see EUROPE 11872).
The European Commissioner for Taxation, Pierre Moscovici, welcomed the improvement in the member states' collection of VAT, but added that the loss, which often ends up in the pockets of fraudsters, criminals or even terrorists, was still unacceptable.
The study shows that in 2016, the VAT gap fell in 22 member states – including Bulgaria, Latvia, Cyprus and the Netherlands, with a drop in VAT losses of more than five percentage points for each. However, the gap grew in six member states: Romania, Finland, the United Kingdom, Ireland, Estonia and France.
According to these latest figures, the lowest gaps were noted in Luxembourg (0.85%), Sweden (1.08%) and Croatia (1.15%), whilst Romania (35.88%), Greece (29.22%) and Italy (25.9%) had the largest gaps.
From the point of view strictly of losses, Italy finds itself at the top of the rankings, at €35.988 million, followed by Germany (€22.679 million), the United Kingdom (€22.04 million) and France (€20.896 million).
The solution has been sitting on the table of the finance ministers for nearly a year: our proposed definitive VAT regime. I urge them to take the opportunity and make progress, Moscovici said.
He also went on to reaffirm the role to be played by moving to qualified majority at the Council of the EU (see EUROPE 12098), stressing that the example of VAT shows the limitations of the current decision-making model in the field of taxation and that moving to qualified majority would make it possible to make faster progress and prevent inertia or the will of a few from hindering the majority.
The study can be consulted at: https://bit.ly/2NYVO4x. (Original version in French by Marion Fontana)