VAT Gap in the EU

Project

21 Dec 2021 - 20 Oct 2022

Adam Śmietanka

Date:

21 Dec 2021 - 20 Oct 2022
Project duration:

21.12.2021 - 20.10.2022
Leader:

CASE– Center for Social and Economic Research

Adam Śmietanka

Economist
Adam Śmietanka is an Economist at CASE. His areas of expertise include data analysis, data visualization, web scraping, and inflation measurement. At CASE, Mr. Śmietanka is responsible for conducting data analysis, economic research, and developing and maintaining CASE’s online monthly consumer price index. His professional experience includes an internship with PwC’s Advisory Team and a … <a href="https://case-research.eu/project/vat-gap-in-the-eu-5/">Continued</a>

Projects from this author:
- The challenges of VAT beyond VAT in the Digital Age
  This study should consider possible improvements to the EU VAT system and assess their feasibility and likely consequences, based on the analysis of its current weaknesses, gaps, inefficiencies. As requested by the ToR, this requires a forward-looking analysis and prospective reflection, combined with and based on the retrospective assessment of the current situation. The study requires, on the one side, a thorough re-assessment of well-known problems of the EU VAT systems, which have been discussed for years by policymakers, scholars and in courts and tribunals, the solutions to which have already been long proposed in the academic as well as policy arena. On the other side, it requires a fresh view to identify new solutions to old problems, new problems and their possible solutions, as well as potential unknown problems, i.e. those that may appear in the future given the current economic, political and legal evolution and the megatrends of the EU and global society. Operationally, the activities needed to achieve the objectives of the study are straightforward. For each of the areas or angle of analysis, the study team will have to: Identify existing weaknesses and challenges of the EU VAT system, including those that may appear in the future given the likely evolution of the current situation. Design solutions to the problems identified. Assess the feasibility and consequences of the solutions identified.
- VAT Gap in the EU
  The core objective of this study is to inform in an accurate, timely, understandable, and attractive manner the national administrations, Commission, academic community, and a broader audience on the value, development over time, and difference across Member States of tax gaps and related parameters. More specifically, the study will cover the VAT compliance gap, … Continued
- VAT compliance gap due to Missing trader intra-community (MTIC) fraud
  Revenues generated by Value-Added Tax (VAT) play an important role in the budgets of European Union (EU) Member States (MS) and the EU; as VAT resource accounts for around 10% of EU own resource revenue and around 26% of MS’s tax revenue. Tax fraud, evasion and avoidance reduce these revenues, and undermine the tax system, affecting … Continued
Author’s projects

The 2022 Study will meet new and significant challenges related to accurate and comparable measurement of the VAT Gap in EU Member States. One of these challenges relates to the structural changes in the economies and VAT systems in 2020 and 2021 resulting from the pandemic. Meeting of this challenge will require additional means to forecast relevant Supply and Use Tables (SUT) that are the core source of information about tax base. It will also require estimating other adjustments triggered by temporary measures introduced by Tax Authorities, like deferrals. Secondly, the 2022 Study will need to lay methodological foundations for the future studies that will not benefit from fiscal data that originating from, so called, Own Resource Submissions (ORS) that were discontinued in consequence of simplifications in procedures introduced by DG BUDG. Moreover, the Study will need to meet important and increasing needs for attractive estimates’ visualisation and shall take advantage of new modalities for presenting the figures.

The set of tasks, components of the analysis and elements of the presentation envisaged for 2022 Study, as set out in the ToR, consist of:

Review of the economic and policy context in 2020 and outlook for 2021, which covers as a minimum: economic conditions, VAT regime changes, sources of changes in VAT revenue components.
Specific research topic: Analysis of the impact of coronavirus pandemic on the VAT Gap.
VAT Gap estimates by EU Member State as well as at EU level.
Policy Gap estimates and collection efficiency by EU Member State as well as at EU level.
Individual country reports.
Econometric analysis of determinants of the VAT Gap: The report shall critically review and where applicable revise the regression approach, methodology used, and the choice of explanatory variables used in previous editions of the VAT gap study reports, significance tests and robustness checks.
Specific research topic: Design and analysis of options in view of likely unavailability of weighted average rate calculations and data sources as of 2021 due to the amended legal framework.
Web front end for visualisation and dissemination.

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

Project leader: CASE– Center for Social and Economic Research

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VAT Gap in the EU

Date:

Project duration:

Leader:

Adam Śmietanka

Projects from this author:

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