Romania remains at the top of the European Union member states for VAT non-collection, with a deficit estimated at 36.7% in 2021, slightly down from 37.3% in 2020, according to a recent European Commission report that analyzes data from the mentioned years .

Romania increased its nominal VAT losses to €9 billion in 2021, compared to €7.9 billion in 2020, the previous year in the report.

“Every year, the European Commission monitors the VAT collection deficit, because this tax is the most prone to fraud and at the same time is one of the main resources of the European budget. The deficit represents losses that state budgets have from VAT due to numerous reasons: evasion, fraud, insolvency, bankruptcy, administrative errors. We see that, unfortunately, Romania continues to be the undisputed champion of VAT losses with €9 billion in 2021. If we compare this amount with the country’s budget deficit of the same year of 80 billion lei, we can see that half could theoretically be covered if VAT was collected at the level of the Netherlands or Finland. In practice, improving VAT administration is not only desirable, but even necessary. The VAT deficit is not only the largest in the EU, but also lags far behind the second country, Greece, which registers a gap of 10 percentage points smaller than that of Romania. Let’s hope that next year the programs implemented or implemented by ANAF, such as e-invoicing, e-cash registers, SAF-T, will provide the authorities with enough relevant data to support them in identifying areas of VAT evasion or non-compliance.” , – explains Daniel Angel, partner and head of fiscal and legal services at PwC Romania.

Read the rest of the article on the PwC Romania blog

The article is signed by Daniel Angel, partner and head of tax and legal consulting at PwC Romania

Article supported by PwC Romania