A new report published on 18 December 2024 by the European Commission highlights substantial improvements in value added tax (VAT) collection in most EU Member States between 2018 and 2022.
The annual EU VAT Gap Report, which assesses the difference between expected VAT revenues and actual collections, shows that Member States lost approximately €89 billion in VAT in 2022, compared to €121 billion in 2018. These losses are primarily attributed to VAT fraud, evasion, avoidance, non-fraudulent bankruptcies, calculation errors, and other factors.
Reducing the VAT compliance gap is a positive development, as lost revenues undermine governments’ ability to fund essential services such as education, healthcare, and infrastructure. Read more