Mind the (VAT) gap: Are our zero rates on the way out?
Colin Laidlaw, Baker Tilly, on the latest EC report
The EC has recently published the findings of a report it commissioned on the ‘VAT gap’ which is defined as the difference between the expected VAT receipts (assuming all VAT due is collected) and the actual VAT collected by Member States. The VAT gap has been calculated at €193bn across the EU which represents 17% of the theoretical VAT due. Italy (€36bn) France (€32bn) Germany (€26.9bn) and the UK (€19bn) contributed to over half of the total VAT gap.
The VAT gap arises from non-compliance and tax avoidance although interestingly the Commission refers to the concept of legal tax avoidance and advises that in the UK for example one-third of the VAT gap in 2009/10 was due to legal tax avoidance – a fact that will surely not slip past ministers unnoticed...
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Home >Articles > Mind the (VAT) gap: Are our zero rates on the way out?
Mind the (VAT) gap: Are our zero rates on the way out?
Colin Laidlaw, Baker Tilly, on the latest EC report
The EC has recently published the findings of a report it commissioned on the ‘VAT gap’ which is defined as the difference between the expected VAT receipts (assuming all VAT due is collected) and the actual VAT collected by Member States. The VAT gap has been calculated at €193bn across the EU which represents 17% of the theoretical VAT due. Italy (€36bn) France (€32bn) Germany (€26.9bn) and the UK (€19bn) contributed to over half of the total VAT gap.
The VAT gap arises from non-compliance and tax avoidance although interestingly the Commission refers to the concept of legal tax avoidance and advises that in the UK for example one-third of the VAT gap in 2009/10 was due to legal tax avoidance – a fact that will surely not slip past ministers unnoticed...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")