EU Member States lost an estimated total of EUR 152 billion in Value-Added Tax (VAT) revenues in 2015, with Romania registering the largest VAT gap, according to a study by the European Commission (EC).

The VAT gap is the overall difference between the expected VAT revenue and the amount actually collected. The largest VAT gaps were reported in Romania (37.2%), Slovakia (29.4%) and Greece (28.3 %). The smallest gaps were observed in Spain (3.5%) and Croatia (3.9 %). In absolute terms, the highest VAT gap of EUR 35 billion was in Italy.

The VAT gap decreased in most Member States, with the strongest improvements in Malta, Romania and Spain, according to the EC. Seven Member States saw small increases, namely Belgium, Denmark, Ireland, Greece, Luxembourg, Finland and the UK.

“Member States should not accept such shocking losses of VAT revenues. While the Commission is supporting efforts to improve collection throughout the EU, current VAT rules date from 1993 and are outdated. We will soon propose to revamp the rules governing VAT on cross-border sales. Our reform will help cut cross-border VAT fraud by 80% and get badly-needed money back to Member State coffers,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.

Find the entire European Commission report here.

Irina Marica, irina.marica@romania-insider.com