On 8 December 2022, the European Commission proposed measures to modernise the EU’s Value-Added Tax (VAT) system, make it work better for businesses and more resilient to fraud, and address challenges in VAT raised by the development of the platform economy.
According to the 2023 VAT Gap Report, EU countries lost €99 billion in VAT revenues in 2020. Conservative estimates suggest that one-quarter of the missing revenues can be attributed directly to VAT fraud linked to intra-EU trade. In addition, VAT arrangements in the EU can still be burdensome for businesses, especially SMEs, scale-ups and companies operating cross-border.
Key actions proposed under ViDA will help EU countries collect up to €18 billion more in VAT revenues annually (€11 billion as a result of anti-fraud measures) while helping businesses, including SMEs, to grow.