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VAT: EU countries have lost €134 billion

Dec 2, 2021 | News

(02 December 2021) – EU Member States lost an estimated €134 billion in Value-Added Tax (VAT) in 2019, according to a new report released today.

© The Business Standard

This figure represents revenues lost to VAT fraud and evasion, VAT avoidance and optimisation practices, bankruptcies and financial insolvencies, as well as miscalculations and administrative errors.

Lost VAT revenues have an extremely negative impact on government spending in public goods and services, such as schools, hospitals and transport.

The missing VAT could also prove beneficial as Member States strive to cover debt incurred during the initial recovery from the COVID-19 pandemic, or raise their climate financing ambitions.

In absolute terms, the highest VAT compliance gaps were recorded in Italy (€30.1 billion) and Germany (€23.4 billion).

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