September 24 (SeeNews) - Romania and Greece were the least performant countries in VAT collection in 2016, according to a European Commission study released earlier this month.
Uncollected VAT represents 6.13 billion euro ($7.2 billion) loss for Romania´s 2016 budget, according to a report recently issued by the EC.
The study also showed that despite the fact that Romania´s standard VAT rate decreased in 2016 from 24% to 20%, Romanian VAT non-compliance increased, negatively contributing to its VAT gap of 35.88%.
Greece raised the standard rate by one percentage point, from 23 to 24 as of July 2016. Uncollected VAT represents 5.9 billion euro loss for Greece's 2016 budget, leading to a VAT gap of 29.22%, the second largest in the EU.
Bulgarian recorded the highest rate of VAT revenue growth among member states in 2016, of 8.8%. Thus, its VAT gap continued to shrink for the third consecutive year, reaching 13.56%.
The VAT gap in Slovenia remained stable and below the EU median in 2016, at 8.04%. At EU level, uncollected VAT amounted to 147.1 billion euro, which represents a 12.3% VAT gap.
In Croatia, strong revenue performance in 2016 led to a significant decrease in the VAT gap to nearly 1.15%. Croatia did not implement any significant changes to VAT rates over the course of 2016, the EC study noted. Croatia is the third best performing country in terms of VAT collection in 2016, being surpassed only by Sweden and Luxembourg.
Annually, the European Commission monitors the VAT collection deficit recorded by the EU Member States, which is calculated as the difference between the VAT liability and the amount of VAT actually collected. The VAT gap covers VAT losses due to evasion, fraud, insolvency, bankruptcy, administrative errors and unlawful tax advantages.
VAT gap in SEE countries (2016):
Country |
VAT Gap (%) |
Romania |
35.88 |
Greece |
29.22 |
Bulgaria |
13.56 |
Slovenia |
8.04 |
Croatia |
1.15 |
($=0.8488 euro)