VAT collection and control procedures report

EU Commission February 12, 2014

INTRODUCTION

In 2011 the total amount of VAT revenue collected in the EU was around € 901 billion, which represented 7.1 per cent of GDP-EU-27 and 18.4 per cent of total tax revenue, including social contributions. The EU VAT system embraced around 26.5 million VAT taxable persons. The VAT-gap, which is the difference between the amount of VAT actually collected and the theoretically collectable amount of VAT, is estimated at 18.4 per cent of GDP-EU.

In 2011, the VAT own resource represented 11 per cent of the EU revenue, being around € 14 billion. For the calculation of the VAT own resource, as a rule, a uniform rate of 0.30% is levied on the harmonised VAT base of each Member State. However, this VAT base is capped at 50% of GNI for each Member State. In addition, for the period 2007- 2013, 4 Member States have reduced VAT call rates: 0.225% for Austria, 0.15% for Germany and 0.10% for the Netherlands and Sweden. Some other corrections exist, in particular the UK rebate. The efficiency of VAT collection and control in the Member States may impact the amount of VAT own resources due by the Member State concerned as well as the relative share in total own resources of other Member States.

Article 12 of Council Regulation 1553/894 on the definitive uniform arrangements for the collection of own resources accruing from VAT requires the Commission to submit a report to Parliament and Council every three years on the procedures applied in the Member States for registering taxable persons and determining and collecting VAT, as well as on the modalities and results of their VAT control systems. This report should enable Member States to assess risks and identify opportunities to improve VAT control and collection systems. Six reports have been made since 1989.

The current report, building on the recommendations of previous reports and taking into account progress already made at EU and national level, aims at measuring improvements in VAT administration in Member States within the framework of Article 12 of the above mentioned Regulation. It takes into account recent developments in tax administration with increased emphasis on preventive measures and promoting voluntary compliance. It aims to identify good practices in the various steps of an effective tax collection, measured against common benchmarks.

In order to prepare this report, a questionnaire on selected issues has been submitted to all Member States to pool the information needed for the report. The data submitted were discussed on several occasions with the Member States. Generally, the data included in the report reflect the situation up to 31 December 2011, unless otherwise indicated. Later developments are covered only if information was made available by a Member State.

CONTENT

II. ANALYSIS
CHAPTER 1: Selected Issues on Organisation of Tax Administrations
CHAPTER 2: VAT Identification, Registration and Deregistration
Threshold and Stratification of VAT Registrations
VAT Registration Procedures
CHAPTER 3: Customs Procedure 42
CHAPTER 4: Submitting VAT Returns (Filing) and Payment
CHAPTER 5: VAT Collection and Recovery
CHAPTER 6: VAT Audit and Investigation
CHAPTER 7: Tax Dispute Resolution System
CHAPTER 8: VAT Compliance
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