EU countries lost almost €137 billion in VAT revenues in 2017 according to the European Commission. The so-called ‘VAT Gap’ shows the difference between the expected VAT revenue and the amount actually collected. The VAT Gap has reduced compared to previous years.

The EU Commission reported that in nominal terms, the VAT Gap decreased by €8 billion to €137 billion in 2017, a drop to 11.2 percent of total VAT revenues compared to 12.2 percent the year before. The VAT Gap decreased in 25 Member States with Malta, Poland and Cyprus displaying strong performances, with a decrease in each case of more than 10 percentage points in VAT losses.

The VAT gap in Ireland was 13 percent in 2017 (here of the report). The Commission’s report notes that in 2018 the VAT gap in Ireland is expected to fall to a single digit value.

Dr Brian Keegan, Director of Advocacy and Voice gives his opinion on the VAT Gap in his Irish Examiner article.