What causes “The VAT Gap”?
VAT News Updates
8th Nov 2018: EU countries lost almost €150 billion in Value-Added Tax (VAT) revenues in 2016, according to a new study published by the European Commission.
The so-called ‘VAT Gap’ shows the difference between the expected VAT revenue and the amount actually collected.
There are five main causes of The VAT GAP:
- Fraud and Tax Evasion
- Corporate Insolvency
- Corporate Bankruptcy
- Legal tax optimization
The VAT Gap decreased in 22 Member States with Bulgaria, Latvia, Cyprus, and the Netherlands displaying strong performances, with a decrease in each case of more than 5 percentage points in VAT losses. However, the VAT Gap did increase in six Member States: Romania, Finland, the UK, Ireland, Estonia, and France.
For further information, the full report can be accessed here.
We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult. Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories every day that you need to know. From breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.
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