18 Dec 2019 - 30 Oct 2021

Study and Reports on the VAT Gap in the EU-28 Member States

The aim of this project is to update the estimates of VAT Gap, identify trends in the VAT Gap time series and monitor progress in closing the Gap.  The study will be complemented by the econometric analysis of VAT Gap determinants. Similarly to previous studies, the set of objectives for the two subsequent updates of the VAT Gap study includes nine components, which are:

  • To discuss the economic and policy context, potential VAT regime changes, sources of potential changes in VAT revenue components.
  • To review and, where applicable, revise the VAT Gap estimates of previous publications for 2014-2018 by taking into account the new or updated data available at the moment of publication and the 5-years period for revision. Furthermore, each publication should include the full series of VAT Gap estimates available since the first estimate for year 2000.
  • To present the estimates of the VAT Gap in 2018 at EU level and for each of the 28 Member States (dedicated individual pages).
  • To include "fast estimates" for the VAT Gap for 2019.
  • To analyse the trends in the VAT Gap estimates that can be interpreted from the numerical estimates.
  • To present estimates of the VAT policy Gap in 2018 at EU level, with a country-by-country analysis on the respective impact that VAT reduced rates and exemptions have on it.
  • To further analyse the VAT gap with respect to possible irregularities over time, such as sudden drops/increases; or with respect to possible anomalies, such as negative gaps or gaps close to zero.
  • To consult the Member States’ statistical offices and Ministries of Finance prior to the finalisation of the calculations, in agreement with the European Commission, in order to validate the results of the analysis and check for and correct possible anomalies in the data.
  • To describe in detail the methodologies used to arrive at the findings in the report, preferably presented in a specific annex.

Project funding: Directorate-General Taxation and Customs Union (DG TAXUD)

Project leader: CASE– Center for Social and Economic Research