EU losing €193bn in VAT to tax evasion

The European Union’s 28 member nations may be losing almost €200bn annually in value-added tax revenues due to tax evasion and a lack of enforcement.

EU Tax Commissioner Algirdas Semeta said today the amount of revenue slipping through the governments’ nets is “unacceptable, particularly given the impact such sums could have in bolstering public finances”.

The study for the European Commission, found member states lost an estimated €193 bn in VAT revenues in 2011, or 1.5% of the EU’s economic output.

While evaded or not-claimed tax payments are inherently hard to measure, the estimated loss adds new urgency to a series of planned European VAT reforms to stop multinational companies from avoiding the tax.