VAT Gap: EU countries lost €140 billion in VAT revenues in 2018, with a potential increase in 2020 due to coronavirus

EU countries lost an estimated €140 billion in Value-Added Tax (VAT) revenues in 2018, according to a new report released by the European Commission on 10 September.

Though still extremely high, the overall ‘VAT Gap’ – or the difference between expected revenues in EU Member States and the revenues actually collected – has improved marginally in recent years. However, figures for 2020 forecast a reversal of this trend, with a potential loss of €164 billion in 2020 due to the effects of the coronavirus pandemic on the economy.

In nominal terms, the overall EU VAT Gap slightly decreased by almost €1 billion to €140.04 billion in 2018, slowing down from a decrease of €2.9 billion in 2017. This downward trend was expected to continue for another year, though the coronavirus pandemic is likely to revert the positive trend.

More information on the VAT GAP
Download the factsheet
Read the Q&A sheet / MEMO