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EU: Report on “VAT gap” for 2017

EU: Report on “VAT gap” for 2017

The European Commission today announced EU countries lost €137 billion in value added tax (VAT) revenues in 2017.

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According to the EC release, the “VAT gap” (the overall difference between the expected VAT revenue and the amount actually collected) was reduced from the amount compared to VAT collected for previous years “but remains very high.” The VAT gap measures the effectiveness of VAT enforcement and compliance measures in each EU Member State because it provides an estimate of revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial insolvencies as well as miscalculations.

According to the EC, this “substantial VAT gap again highlights the need for comprehensive reform of the EU VAT rules.” 

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