EU report shows significant progress in VAT compliance across Member States
Most EU Member States made significant progress in VAT collection between 2018 and 2022, according to a new report released by the European Commission (EC) on 18 December.
The annual VAT Gap in the EU Report, which measures the difference between theoretically expected VAT revenues and the amount actually collected, shows that Member States lost around €89 billion in VAT in 2022, compared to €121 billion in 2018. This figure represents revenues lost primarily to VAT fraud, evasion, avoidance, non-fraudulent bankruptcies, miscalculations, and other factors.
European Parliament adopts fast-track procedure for ViDA and DAC 9
The EP’s ECON Committee discussed the way forward on VAT in the Digital Age (ViDA) and the Directive on Administrative Cooperation, focusing on how to support companies with their filing obligations under the Pillar 2 Directive (DAC 9) during their meeting on 16 January. On both files, the EP must provide its non-binding opinion before the proposals become formally EU law.
For ViDA, the EP had previously produced a non-binding opinion on the EC proposal, after which the Council reached a political agreement on 5 November 2024. However, as the Council’s final agreement differed significantly from the EC’s original proposal, it was decided that the EP should provide a new opinion. For DAC 9, the Council is making progress, with a political agreement potentially expected already in March.
For both files, the ECON Committee decided at its meeting to adopt a fast-track procedure without amendments, to enable both files to be swiftly introduced into EU law. MEP Aurore Lalucq (S&D/France) is leading the EP’s work on DAC 9, whilst MEP Ľudovít Ódor (RE/Slovakia) is leading on ViDA. A final Plenary vote on both opinions is currently scheduled for 11 February.
