30 September 2016
According to the annual VAT Gap study an estimated €160 billion in VAT revenues was lost due to non-compliance or non-collection during the year 2014, when compared with the same study from 2013. This shows a reduction in the gap of €2.5 billion.
The VAT Gap study is funded by the European Commission as part of its work to reform the VAT system in Europe, as well as its wider campaign to clamp down on tax evasion.
Each year the study sets out detailed data on the gap between the amount of VAT due and the amount actually collected in the 28 Member States. The main factors contributing to the VAT Gap are said to be evasion, complicated systems of VAT and mistakes due to multiple VAT rates.