The latest VAT Gap report, published by the European Commission on 11 December 2025, reveals that EU Member States failed to collect EUR 128 billion in VAT revenue in 2023. This represents around 9.5% of the VAT theoretically due, highlighting ongoing challenges in VAT collection and the continued need to strengthen tax compliance across the EU.
The main causes identified include tax fraud, reporting errors and weaknesses in national VAT administration systems. The picture varies significantly between Member States : some countries, such as Austria, report a VAT Gap below 1%, while others, such as Romania, reach levels of around 30%.
The report also underlines the need for further measures to secure public revenue and ensure fair competition between businesses. These include the digitalisation of tax procedures, stronger cross-border cooperation and greater harmonisation of VAT control and recovery tools across the EU.
