Downward trend in EU VAT gap continues

The VAT gap decreased by €7.9bn to €137.5bn in 2017 representing a drop to 11.2% of total VAT revenues compared with 12.2% the year before when the gap was €145.4bn. This downward trend is now in its fifth consecutive year.

Romania recorded the largest national VAT gap at 36%. This was followed by Greece (34%) and Lithuania (25%). The smallest gaps were in Sweden Luxembourg and Cyprus where only 1% of VAT revenues on average were lost. In absolute terms the highest VAT gap of €33.5bn was in Italy.

Individual performances across member states vary. The gap decreased in 25 countries and increased in three. Malta (-7 percentage points) Poland (-6 percentage points) and Cyprus (-4 percentage points) showed strong performances with a large decrease in their VAT losses. Seven – Slovenia Italy Luxembourg Slovakia Portugal Czechia and France – also revealed...