Spain lost 3.396 million in 2020 due to fraud and VAT errors

According to the analysis, these 15 Member States currently regularly monitoring VAT compliance gaps. The report also states that the covid-19 outbreak has caused 19 out of 27 Member States to experience a decline in VAT revenue due to the decline in global consumption and loss of revenue due to temporary reductions in the VAT fee. European governments to reduce the economic impact.

Despite this, the European Commission’s message has not changed: The VAT gap remains an urgent issue that needs to be addressed, especially at a time when governments need sustainable revenues to help weather the current economic uncertainty, and because a quarter of the losses – around 24 billion euros according to “conservative” figures from Brussels – are a direct result of tax evasion in intra-community trade. “It is necessary to reduce tax fraud and evasion,” insisted Paolo Gentiloni, Commissioner for Economic Affairs, during the presentation of two new initiatives to harmonize the tax system and improve digitalization to combat tax evasion.

Inequalities among 27 people

The report also includes a range of 1.3% in Finland, 1.8% in Estonia and 2% in Sweden, 20.8% in Italy, 24.1% in Malta and 35.7% in Romania. draws attention to the large inequalities that still exist between Member States. But nominally the largest gaps Italy (26,000 million), France (14,000 million), and Germany (11,000 million). However, the situation changes when the “policy gap” is analyzed, which is the indicator of the additional VAT revenue that a Member State could theoretically collect if it applies a uniform VAT rate to all its consumption of goods and services and would result in the ideal theoretical result. Income.

Under this assumption, losses estimated by Brussels due to various exemptions were 36% of the ideal theoretical income. In this case, the country with the largest deficit is Spain (47%), Slovakia will record the best margin (16%), ahead of Greece and Finland (about 42% each), with Malta. According to the report, most of the gap due to exemption consists of exemptions for services that cannot be taxed in principle, such as imputed rents, provision of public goods by the Administration or financial services.

Real-time notifications

To further narrow the gap and strengthen the system, Brussels made a new proposal this Thursday. Measures to modernize VAT rules This could allow the Twenty-Seven to rise €18 billion more per year. The plan revolves around three elements. First, the system enters real-time digital notification in electronic invoicing for companies operating across borders, which will allow governments to learn more and fight fraud. According to Brussels estimates, this will reduce VAT corruption by up to 11 billion euros per year over the next ten years and reduce administrative and compliance costs for EU operators by more than 4.1 billion euros per year.

Second, the proposal proposes the update. VAT rules for passenger transport and short-term hosting platforms. The plan stipulates that operators are responsible for collecting VAT and forwarding it to tax authorities when service providers fail to do so, for example because it is a small company or an individual provider. Finally, Brussels is a Single VAT registration across the EU As it is a one-stop shop for online shopping companies. This way, companies selling to consumers in other Member States will be able to register for VAT once for the entire EU and fulfill their VAT obligations in a single language through a single online portal. According to estimates, with this mechanism, companies can save about 8.7 billion euros in administrative and registration costs over ten years.