Abstract:

In Europe many jurisdictions are challenged by the tax collection process efficiency, to a greater or lesser extent, mostly in the field of Value- Added Tax (“VAT”), therefore, at the level of the European Commissiona series of measures to digitalise and modernise the EU VAT system to be
more efficient for businesses and governments and to bemore resilient to fraud are currently subject to discussion and development. The most recent VAT Gap report issued in December 2022 shows an estimated overall VAT gap in the EU in 2020 of 93 billion EUR, a drop of approximately 30 billion EUR compared to the revised 2019 figures. The same report also shows high disparities of the VAT gap level between EU jurisdictions, more specifically, in 2020 the estimated VAT gaps among Member States ranged from 1.3% in Finland, 1.8% in Estonia and 2% in Sweden, to 20.8% in Italy, 24.1% in Malta and 35.7% in Romania. In order to combat tax evasion and fraud in general and more specifically to reduce the VAT gap, many EU jurisdictions have implemented certain digitalisation measures, among which the electronic invoicing is one of the measures already successfully implemented in countries such as Italy, France, Poland and Spain and as a consequence of the positive response since the implementation of the e-invoicing system, the EU Commission 2 is currently making a move to real-time digital reporting based on einvoicing for businesses that operate cross-border in the EU.