The European Commission will publish a communication, in the 1st or 2nd quarter of 2021, to help Member States reduce their value added tax (VAT) gap, i.e. the difference between expected VAT receipts and amounts actually collected, according to a roadmap published on Wednesday 3 February.
Value added tax (VAT) revenue is a vital input for the budgets of the Member States and the EU, the Commission points out. The ability of national tax administrations to collect VAT will thus play an important role in post-Covid-19 economic recovery.
The statistics show that there are currently significant differences between Member States’ national VAT gaps, ranging from a maximum of more than 33% of total VAT to a minimum of less than 1%.
The Communication will focus on giving examples of good practices that have led to concrete positive results for the VAT collection system in Member States.
It should be remembered that in 2018 the overall VAT gap in the EU was around €140 billion. In a study published in September, the commission estimated that EU countries could lose €164 billion in VAT revenue in 2020 as a result of the Covid-19 pandemic and the business failures it caused.
See the roadmap: http://bit.ly/2O8C2Wa (Original version in French by Marion Fontana)