EU: “VAT gap” reflects lost revenue, almost €160 billion

EU: “VAT gap” reflects lost revenue

The European Commission (EC) today reported that €159.5 billion in value added tax (VAT) revenues were lost across the EU in 2014.

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Today’s EC release reports that the overall difference between the expected VAT revenue and the amount actually collected—the “VAT gap”—supports an effort to overhaul the EU's VAT system to address fraud and make the VAT system more efficient. 

EU Member States are to follow up on the EC’s action plan towards a single VAT system, and to agree to move towards a definitive VAT regime for cross-border trade. With today’s report, the EC stated that more immediate measures are needed to address VAT fraud and that deeper reforms are needed.

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