An Overview over Value Added Tax Gap in the European Union

Value Added Tax (VAT) is a common tax to European Union Member States and is one of their main sources of revenue.Currently, in the European Union, the analysis and measurement of the Value Added Tax gap (VAT gap) has become necessary for fiscal administrations as a consequence of the increase in Value Added Tax evasion.In our paper the aim is to briefly present the features of Value Added Tax, the main objective being to analyze the VAT gap at European Union level and within Member States.The debate on the VAT gap is complex because of the impact of fiscal revenue collection on the economy and society.Other objectives are to present the factors influencing the VAT gap, the VAT rates applied in member countries and to examine the impact of the number and level of reduced rates on the VAT gap.