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EUR 160 billion VAT gap "unacceptable", says EU

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EUR 160 billion VAT gap "unacceptable", says EU

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(BRUSSELS) - EU Member States lost a staggering EUR 159.5 billion in uncollected VAT revenue in 2014, according to figures released by the European Commission on Tuesday in support of its case for VAT reform.

This is unacceptable, said the EU's Economic Affairs Commissioner Pierre Moscovici: "The current regime is woefully ill-equipped to deal with the problems of VAT fraud and miscalculations, and it's clear that the numbers will not get better by themselves."

The VAT Gap - the difference between expected VAT revenues and VAT actually collected - provides an estimate of revenue loss due to tax fraud, tax evasion and tax avoidance, but also due to bankruptcies, financial insolvencies or miscalculations.

Mr Moscovici is urging Member States to agree on the "fraud-proof EU VAT system" laid out by the Commission earlier this year, in order to "tackle this issue once and for all."

The plan 'Action Plan on VAT – Towards a single EU VAT area in April 2016' sets out ways of tackling the VAT Gap as well as long term solutions aiming to overcome VAT fraud and improve VAT collection generally across the EU.

Steps towards a single EU VAT area are outlined, with the aim of adapting the VAT system to the realities of the EU's internal market, the digital economy and the needs of SMEs.

Today's report shows that the VAT Gap rate ranged from a high of 37.9% of uncollected VAT in Romania to a low of only 1.2% in Sweden. In absolute terms, the highest VAT Gap of €36.9 billion was recorded in Italy while Luxembourg had the lowest of €147 million.

The VAT Gap study - funded by the Commission as part of its push to reform VAT in Europe and clamp down on tax fraud and evasion - reports improvement by some Member States in their VAT revenue collection.

However, "substantial progress" can only be achieved, says the Commission, if Member States agree to make the current EU VAT system simpler, more fraud-proof and business-friendly.

Compared to 2013, the 2014 VAT GAP decreased by €2.5 billion but individual performances of Member States still vary enormously when it comes to VAT compliance. Some 18 Member States showed an improvement in their figures, while eight Member States failed to collect more VAT revenues than the year before.

The Commission is due to will table legislative proposals in 2017 to re-establish the principle of charging VAT on cross-border trade within the EU.

Cross-border fraud accounts for € 50 billion of the VAT Gap each year in the EU and the new system should reduce cross-border fraud by 80% (about €40 billion).

Full report of the 2016 VAT Gap study

Action Plan towards a single VAT area

Measures to tackle VAT fraud

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EUR 160 Billion gap...

Posted by Demir Arabaci at 06 September 2016, 19:09 CET

The world watched once again at the G20 Summit that chinese really are 1.4 billion ignorant monkeys.
Ignoring and intentionally delaying the stairs to the Airforce One was the latest fiasco by some chinese monkeys trying to prove that they are somebody???
We all know that they are nothing more than a nation of ignorant monkeys.