Italy has the highest VAT evasion rate of any of the five major European economies. Despite progress made in 2022, with the VAT gap narrowing from 21.5% in 2021 to 10.8%, it remains the largest among Germany, France, Spain, and the Netherlands. Italy has a revenue potential of €135.58 billion, but only €120.98 billion has been collected, leaving a €14.6 billion gap. This is the conclusion of a report published by the Unimpresa Study Center, which found a significant disparity between Italian and German data. Germany has a VAT gap of 2.8%, with a potential revenue of €266.85 billion and €259.39 billion actually collected, resulting in a €7.4 billion shortfall; even France, despite previous issues, has outperformed Italy, with the French VAT hole falling from 8.5% to 4.9% in 2022, with a potential revenue of 194.28 billion euros and 184.73 billion actually collected, resulting in a €9.5 billion shortfall. Spain, on the other hand, represents a real success story, considering that reducing the VAT shortfall from 5.5% to 0.8% is a gap of just 660 million: potential revenue of 82.91 billion euros and 82.25 billion actually collected. The Netherlands has the lowest VAT difference among major European countries, at 0.2%. Potential Dutch revenues are €65.25 billion, with €65.40 billion actually collected, indicating an extremely efficient tax system and high taxpayer compliance.
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