EU new report on tax and VAT collection

National tax administrations should invest in modern and efficient digital tools if they want to see an improvement in their tax revenues. I call on tax administrations to continue working together for more efficient tax collection and to better fight tax fraud and avoidance. The Commission stands ready to support EU countries in their continued efforts.” Said Pierre Moscovici, Commissioner for Economic Affairs, Taxation and the Customs Union.

The European Commission has today published a series of recommendations for Member States on how to better work together towards better direct tax and VAT collection for national budgets. In particular, the results show that investment in digital and IT systems, as well as investment in human resources, will be crucial if EU countries want to improve their public finances. Today’s reports highlight the overall positive impact of the EU-wide cooperation between tax administrations on tax collection, but also show that Member States have to deploy more resources to improve tax collection – an issue which, for VAT alone, can lead to losses for national budgets of up to €150bn a year. The Commission has this year already put forward far-reaching reforms of the VAT system to create a definitive VAT system and to create a single European VAT area that is simpler and fraud-proof. Cooperation between countries to recover lost taxes should also be improved, the report says, and countries should make better use of new data that is being collected as part of the major reforms on information exchange – an accomplishment which should give the fight against tax avoidance a major boost in the EU. The Commission will now take these findings forward with Member States to see how they can be addressed.

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