It is certainly an incredible coincidence that the Commission, a week after Apple was slapped with a €13 billion fine for tax avoidance, published a report on the amount of uncollected VAT in the European Union. It is not directly related, but the inspiration is clear. According to the latest research, a staggering €160 billion was lost in 2014 due to dubious tax practices. What is officially called ‘VAT gap’ (the difference between expected and actually collected VAT) stubbornly resists measures to combat it year after year. The Commission immediately used the research results as an argument for its long-standing desire for a complete overhaul of the VAT system in the European Union, that is, for ‘nudging’ member states towards the formation of a single VAT area outlined in the Action Plan. Despite various measures, the European executive concludes, the findings of the report indicate the need for deeper reforms.
Italians with the Largest Deficit
According to absolute criteria, Italy is the clear winner with a deficit of €36.9 billion in its treasury, while in relative terms, Romania ranks first with a discrepancy of 37.9 percent of uncollected tax. The most diligent payers are in Sweden, where the ‘gap’ is a negligible 1.2 percent, and the tax-friendly Luxembourg, strangely enough, has the smallest amount of uncollected tax, just €147 million. Croatia, included in this research for the first time, is one of the best members in this area despite the prevailing impression, with a discrepancy of 8.67 percent, which is five percent lower than the European average. Only Belgium (8.39 percent), Slovenia (8.14), Finland (6.92), Luxembourg (3.8), and Sweden perform better.
