Study to Quantify and Analyse the VAT Gap in the EU-27 Member States

CASE Network Reports No. 116/2013

168 Pages Posted: 11 Dec 2013

See all articles by Luca Barbone

Luca Barbone

CASE - Center for Economic and Social Research; Institute for the Study of International Migration

Misha Belkindas

CASE - Center for Social and Economic Research; Open Data Watch

Leon Bettendorf

CPB Netherlands Bureau of Economic Policy Analysis

Richard M. Bird

University of Toronto - Joseph L. Rotman School of Management; Georgia State University - Andrew Young School of Public Policy

Mikhail Bonch-Osmolovskiy

CASE - Center for Social and Economic Research

Michael Smart

University of Toronto - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 9, 2013

Abstract

This report presents and discusses the findings of the “Study to quantifyand analyse the VAT Gap in the EU-27 Member States” (Contract TAXUD/2012/DE/316, FWC No. TAXUD/2010/CC/104), conducted by CASE and CPB.The structure of this report is as follows. In Chapter 1, we discuss the structure of the VAT systems in the EU, the broad trends in the EU economy over the period 2000-2011, and review the behaviour of VAT revenues, as well as the changes in VAT rates and exemptions that have occurred as a response to economic events or policy decisions. We pay particular attention to the events following the onset of the economic crisis in 2008. In Chapter 2, we discuss the definition of VAT Gaps that has been used in this study, as well as other alternatives existing in the literature. We review possible shortcomings associated with different concepts. In Chapter 3 we present the results of the estimations for EU-26 countries for the period 2000-2011. The estimates are first discussed for the EU-26 as a whole, and then for each country individually. Chapter 4 provides an econometric analysis of the determinants of VAT Gaps for the period under consideration. Appendix A discusses the methodology followed with regard to the estimates, and Appendix B reviews the differences with other, official and unofficial, estimates of the Gaps. Appendix C provides additional statistical material.

Keywords: Optimal Taxation, Efficiency, Incidence, Externalities, Redistributive Effects, Environmental Taxes and Subsidies, Personal Income and Other Nonbusiness Taxes and Subsidies, Business Taxes and Subsidies, Tax Evasion, Other Sources of Revenue, Other

JEL Classification: H20, H24, H25, H26, H62

Suggested Citation

Barbone, Luca and Belkindas, Misha and Bettendorf, Leon and Bird, Richard Miller and Bonch-Osmolovskiy, Mikhail and Smart, Michael, Study to Quantify and Analyse the VAT Gap in the EU-27 Member States (October 9, 2013). CASE Network Reports No. 116/2013, Available at SSRN: https://ssrn.com/abstract=2365189 or http://dx.doi.org/10.2139/ssrn.2365189

Luca Barbone (Contact Author)

CASE - Center for Economic and Social Research ( email )

Al. Jana Pawła II 61/212
Warsaw, 01-031
Poland

Institute for the Study of International Migration ( email )

Whitehaven Street
Washington, DC
United States

Misha Belkindas

CASE - Center for Social and Economic Research ( email )

Al. Jana Pawła II 61/212
Warsaw, 01-031
Poland

Open Data Watch ( email )

Leon Bettendorf

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

Richard Miller Bird

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
905-274-8841 (Phone)

Georgia State University - Andrew Young School of Public Policy

International Studies Program
Atlanta, GA 30303-3083
United States

HOME PAGE: http://www.aysps.gsu.edu

Mikhail Bonch-Osmolovskiy

CASE - Center for Social and Economic Research ( email )

Al. Jana Pawła II 61/212
Warsaw, 01-031
Poland

Michael Smart

University of Toronto - Department of Economics ( email )

150 St. George Street
Institute for Policy Analysis
Toronto, Ontario M5S 3G7
Canada
416-978-5119 (Phone)
416-978-6713 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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