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VAT reports published

The Concept of Tax Gaps – Report on VAT Gap estimationspdf(2.03 Mb) Choose translations of the previous link 

This report, prepared by the Fiscalis Tax Gap Project Group, provides an introduction to the methodologies currently applied to estimate tax gaps, with its main focus on VAT gap estimations. Tax gap estimations are rough indicators of revenue loss and over the last decade several methods have been developed by national (tax) administrations and international institutions to estimate these losses. This report presents the most important aspects of tax gap estimations in order to provide a better understanding of the estimation methodologies and to share information with a broader public. 

11/03/2016

2013 Update Report to the Study to quantify and Analyse the VAT Gap in 26 EU Member States pdf(1.16 Mb)

 

This report provides estimates of the VAT Gap for 26 EU Member States for 2013, as well as revised estimates for the period 2009-2012. It is a follow-up to the “Study to quantify and analyse the VAT Gap in the EU-27 Member States”, published in October 2014. See the press release (IP/15/5592) and the frequently asked questions (MEMO/15/5593).

4/08/2015

Study on implementing the VAT ‘destination principle’ to intra-EU B2B supplies of goodspdf(1.48 Mb)

The study carried out by the Commission analyses five policy options for tackling two essential issues in the current VAT system: the additional compliance costs borne by businesses that conduct cross-border trade when compared to those businesses that only trade domestically and the occurrence of VAT fraud. The five policy options are designed to enable the implementation of a destination based VAT system across the EU.

13/07/2015

Assessment of the application and the impact of the VAT exemption for importation of small consignment

Final reportpdf(2.67 Mb)

Executive summarypdf(566 kB)

The EU VAT Directive provides for a VAT exemption on the importation of small consignments below the EUR 10/22 threshold. This exemption is implemented by all 28 EU Member States. The Study carried out for the Commission presents an overview of the legal framework and procedures in place in the 28 EU Member States, as well as an economic analysis of the low value consignments market from 1999 until 2013, including an estimation of the potential VAT foregone by tax authorities due to this exemption

22/05/2015

Economic Study on Publications on all Physical Means of Support and Electronic Publications in the context of VAT

Final reportpdf(2.2 Mb)

Abstractpdf(47 kB)

Annex Apdf(1.62 Mb)

Annex Bpdf(583 kB)

Annex Cpdf(1.44 Mb)

The study aims at assessing the substitutability between physical and electronically-supported publications; evaluating the impact of current VAT reduced rates; and evaluating the impact of extending either the reduced rate or the standard rate regime to all kinds of publications.

20/03/2015

VAT rates structure

Final reportpdf(2.85 Mb)

Addendumpdf(3.06 Mb) Choose translations of the previous link 

Annex 1zip(1.36 Mb)

Annex 2zip(350 kB)

The study assesses the main economic effects of the current VAT rates structure and the economic effects that would follow from abolishing zero and reduced rates, under various hypotheses, including the introduction of compensatory measures.

20/03/2015

Study on the economic effects of the current VAT rules for passenger transport

Volume 1pdf(4.94 Mb)

Volume 2pdf(6.3 Mb)

Volume 3

The current VAT rules for passenger transport activities can create distortions of competition, notably owing to differences among Members States in the application of VAT exemptions or reduced rates. Even where exemptions or reduced rates do not apply, the complexity of the current place-of-supply rules increase compliance costs and may cause voluntary or involuntary non-compliance.

Since the last large-scale review in 1997, the passenger transport sector has changed in a considerable way, as a result of the greater impacts of airline deregulation, implementation of rail concessioning, and the deregulation of bus transport. The cruise industry has also changed and experienced high growth. Hence, the importance of the distortions has increased.

This study contributes to the debate on possible options for reform by providing a summary of the current state of the passenger transport market, a review of the current VAT regime, an assessment of the impact of many of the distortions and an evaluation of some alternative VAT solutions on which a future improved VAT regime for the transport sector might be based.

15/01/2015

Assessment of the application and impact of the optional 'Reverse Charge Mechanism' within the EU VAT systempdf(2.62 Mb) Choose translations of the previous link 

A reverse charge mechanism (RCM) has been implemented in Member States' legislation in a number of specific cases as an "anti-fraud tool" in certain sectors that are vulnerable to fraud. In addition to measures that are based on derogations granted by the EU Council in accordance with Article 395 of the Directive 2006/112/EC (hereafter "VAT Directive") or the standstill provision of Article 394 of this Directive, Member States can apply the RCM, under certain conditions, to sectors or types of transactions that are enumerated in Articles 199 and 199a of the VAT Directive. This Study identifies the Member States that make use of the options to apply a RCM and evaluates the economic importance of the RCM, the cash-flow impacts of the RCM and the administrative burden on business of applying the RCM. See the summarypdf(530 kB) Choose translations of the previous link  .

19/12/2014

2012 Update Report to the Study to quantify and analyse the VAT Gap in the EU-27 Member Statespdf(985 kB)

This report provides estimates of the VAT Gap for 26 EU Member States for 2012, as well as revised estimates for the period 2009-2011. It is a follow-up to the "Study to quantify and analyse the VAT Gap in the EU-27 Member States", published in September 2013. See the press release (IP/14/1187) and the frequently asked questions (MEMO/14/602).

23/10/2014

Study to quantify and analyse the VAT Gap in the EU-27 Member States
Final Report
pdf(3.14 Mb)

The study aims to understand the recent trends in the field of VAT collection better, by updating the VAT Gap estimates for 2000-2006 produced in the Reckon Report of 2009 and by providing estimates for the VAT Gap for the period 2007-2011.
Press release IP/13/844 and frequently asked questions (MEMO/13/800).

19/09/2013
Study on the feasibility and impact of a common EU standard VAT returnzip(9.1 Mb)

Study on the feasibility and impact of a common EU standard VAT return

08/03/2013
Study on applying the current principle for the place of supply of B2B services to B2B supplies of goodszip(13.71 Mb)

A feasibility study carried out by PwC to examine the option of applying the current principle for the place of supply of B2B services to B2B supplies of goods (place of establishment of the customer), without following the physical flow of the goods within the EU.

24/01/2013
Study on VAT in the public sector and exemptions in the public interest (final report of a follow up study)pdf(4.05 Mb) Choose translations of the previous link 

The study analyses and measures the issues arising from the current VAT treatment of public bodies and activities carried out in the public interest. It also identifies possible options for the future, and measures their impact. The views expressed by the contractor do not necessarily reflect those of the European Commission. The Commission accepts no responsibility or liability whatsoever with regard to the information in this study

11/01/2013
Report from the Commission to the Council on supplies on board of means of transport pdf(86 kB) Choose translations of the previous link 

Directive 2006/112/EC (the 'VAT Directive') provides that the Commission presents to the Council a report on the VAT treatment of goods and services, including restaurant and catering services, supplied to passengers on board means of transport. The report focuses not only on the place of taxation but also on exemptions currently applied in this sector.
The expert study of 8 February 2012 conducted by PwC for the Commission on this subject is published together with this report.

22/10/2012

VAT - Expert study on the issues arising from a reduced time frame and the options allowed for submitting recapitulative statements pdf(1.55 Mb)

Appendix 1 pdf(805 kB)

Appendix 2 pdf(912 kB)

Appendix 3 pdf(103 kB)

Appendix 4 pdf(85 kB)

Final report on the application of Article 263(1) of Directive 2006/112/EC (amended by Directive 2008/117/EC), implemented since 1 January 2010.
Article 263(1) aims at ensuring that information on intra-Community supplies of goods, including deemed supplies, and services is collected and exchanged between Member States more quickly, so as to enable quicker detection of fraud, in particular VAT carousel (missing trader) fraud.
The report was drawn up for the European Commission by PWC in 2011 and focuses on the consequences for business arising from a reduced time frame for submitting recapitulative statements and the possibilities offered to Member States to derogate from the normal rule.

08/05/2012

A retrospective evaluation of the elements of the VAT system pdf(5.29 Mb)

Executive Summarypdf(73 kB) Choose translations of the previous link 

Formal answers to the Evaluation Questions pdf(599 kB)

In December 2010, the Commission signed a contract for a retrospective evaluation of the consequences, in economic terms, of the functioning of the most pertinent elements of the current EU VAT system, as identified in the "Green Paper on the future of the VAT". The final report was submitted by the external consultants on 5 December 2011.
This evaluation looked into the design and implementation of certain VAT arrangements, assessing their effectiveness and efficiency in terms of results and impacts they had created. It examined their relevance and their coherence with the smooth functioning of the single market and the requirement to avoid distortion of competition specified in Article 113 of the Treaty on the Functioning of the European Union.

05/12/2011
VAT in the public sector and exemptions in the public interest pdf(1.46 Mb)

The study analyses and measures the issues arising from the current VAT treatment of public bodies and activities carried out in the public interest. It also identifies possible options for the future, and measures their impact.

See the summarypdf(549 kB) Choose translations of the previous link 

12/04/2011
Study to quantify and analyse the VAT gap in 25 EU Member Statespdf(1.11 Mb)

The study analyses the gap between the amount of VAT due and the amount received in 25 Member States. See also the press release ( IP/09/1655 Choose translations of the previous link  )

30/10/2009
Study on the VAT invoicing rules contained in the VAT Directive

A study on the VAT invoicing rules contained in the VAT Directive (2006/112/EC) was carried out for the European Commission by PricewaterhouseCoopers. It aims to look at the four principal areas of invoicing - the requirement to issue an invoice, the content of an invoice, electronic invoicing and the storage of invoices - with a view to mapping the existing legislation in all Member States, analysing burdens on business and Member States' control needs, and providing recommendations for a more harmonised and modern set of VAT invoicing rules.

16/01/2009
Reduced VAT for environmentally friendly productspdf(837 kB) Choose translations of the previous link 

The study examines the potential use of reduced VAT on environmentally friendly goods and the current application of reduced VAT on energy consumption by households. The analysis is carried out in the context of EU policy approach to climate change and energy security, including interaction with other policy instruments at the EU and national levels. The core of this study focuses on what role - if any - should VAT rate policy play in underpinning these objectives.

19/12/2008
The Potential Benefits of using Differential VAT for Environmental Purposes

The study looks at the potential impacts of changing current VAT rates to align them with environmental goals in some specific cases - domestic energy supply, food and dairy products, insulation materials, white goods and boilers. It finds that the suitability of differential VAT as a policy instrument differs greatly across products, in particular depending on the nature of the market failure in consumer behaviour which the VAT rate would be trying to correct.

25/06/2008
Study on the possible impact of measures envisaged for fighting VAT fraud (Timeframes)pdf(2.69 Mb)

In its Communication on the need to develop a coordinated strategy to fight against fiscal fraud ( COM/2006/254) the Commission suggested a series of measures to improve the exchange of information. One of these measures is the reduction of timeframes for the collection and exchange of information on intra -Community transactions. This measure was pointed out by the Council in its conclusions of 5 June 2007 as a priority measure to implement. This study analyses the possible impact of this measure on businesses active in intra-Community trade.

17/01/2008
Study in respect of introducing an optional reverse charge mechanismpdf(1.69 Mb) Choose translations of the previous link 

One of the debated solutions to combat certain types of VAT fraud is the introduction of a general reverse charge mechanism in the VAT system. The European Commission therefore decided to explore the impact of the introduction in certain Member States of such a system.

20/07/2007
Reduced VAT applied to goods and services in the EU Member Statespdf(714 kB)

The study examines the theoretical and empirical merits of four different arguments for reduced VAT rates. Two based on efficiency grounds: Can reduced VAT increase efficiency by increasing productivity or by reducing structural unemployment? Another two based on equity grounds: Can reduced VAT enhance equity by improving the income distribution or by making particular products more accessible to the entire population?

21/06/2007
Study on reduced VAT applied to goods and services in the Member States of the EU

The study examines the impact of reduced VAT rates and of derogations, not only for locally supplied services, but also more globally. The effects on income distribution, the informal economy and compliance costs for businesses were also taken into consideration. Read more.

Studypdf(714 kB)

Appendicespdf(1.41 Mb)

21/06/2007
Economic effects of the VAT exemption for financial and insurance services

The study carried out by PricewaterhouseCoopers aims to increase the understanding of the economic effects of the VAT exemption for financial and insurance services. The views expressed in the report are solely those of the authors and do not necessarily reflect the views of the European Commission, nor bind the Commission. The analysis and conclusions presented are the sole responsibility of the authors.

Management summarypdf(1.19 Mb) Choose translations of the previous link 

Main reportpdf(3.95 Mb) Choose translations of the previous link 

Annexespdf(2.24 Mb) Choose translations of the previous link 

02/11/2006
COM(2004) 855pdf(122 kB) Choose translations of the previous link 

Report from the Commission to the Council and the European Parliament: Fifth report under article 12 of Regulation (EEC, Euratom) No 1553/89 on VAT collection and control procedures - see also annexpdf(293 kB)

20/01/2005
COM (2004) 260

Report from the Commission to the Council and the European Parliament on the use of administrative cooperation arrangements in the fight against VAT fraud.

Press Release IP/04/523 Choose translations of the previous link  .

16/04/2004
COM (2001) 599

Report from the Commission on reduced VAT rates drawn up in accordance with Article 12(4) of the Sixth Council Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment.

22/10/2001
Taxation - Requirements imposed by Member States for invoicespdf(508 kB)

Study on the requirements imposed by the Member States, for the purpose of charging taxes, for invoices produced by electronic or other means (Tender XXI/98/CB-5010).

23/08/1999
COM (1999) 185

Commission Report on the Community Art Market
Report from the Commission to the Council on the Examination of the impact of the relevant provisions of Council Directive 94/5/EC on the competitiveness of the Community art market compared to third countries' art markets.

Press Release IP/99/274 Choose translations of the previous link  .

28/04/1999
A study of the VAT regime and competition in the field of passenger transportpdf(682 kB)

Passenger transport is taxed on the basis of distance covered in each Member State and tax is collected at internal frontiers. Many different tax rates apply to passenger transport across the EU with some Member States applying exemptions and zero-rates. Even within the same Member State competing modes of passenger transport may be taxed differently. The study explores the economic, fiscal and practical effects of a number of alternative taxation structures for passenger transport services performed within the EU.

23/10/1997
VAT on financial services

Report giving a detailed description of a modified form of the cash flow system of VAT (The TCA-ADD Report).

A study of Methods of Taxing Financial and Insurance Servicespdf(7.93 Mb), carried out for the European Commission by Ernst & Young, 1996 (The 'blue book').

Note:The Commission has from time to time sought consultants' reports on VAT on financial services and insurances. We frequently receive requests for access. To facilitate this, they are published on the website to the extent that the contents permit.

For the TCA-ADD Report, publication is restricted to the introduction and an extensive executive summary. The more detailed annexes of this report focus on field testing of the TCA model. This was undertaken with the assistance of several financial institutions and insurance companies who participated on an expressed commitment of confidentiality. As the annexes contain extensive data which was supplied on this understanding, these parts of the report are not being made publicly available.

11/11/1996
Study on the application of Value Added Tax to the property sectorpdf(511 kB)

This study performed for the European Commission deals with the application of Value Added Tax to the property sector in 15 Member States of the European Union.

30/09/1996
COM/88/799pdf(1.64 Mb) Choose translations of the previous link 

Second report from the Commission on the application of the common system of VAT, submitted in accordance with Article 34 of the Sixth VAT Directive.

20/12/1988