Analysis of VAT gap in the EU

Kübra Okumuş

Master's thesis

Abstract:

Value-added tax is the most significant indirect tax revenue for the state’s income and one of the most important tax policy tools. This tax, which spread rapidly to many countries, gave trade market participants the opportunity to find ways to avoid the Value Added Tax. This issue makes the governments doubt the reliability of the current Value Added Tax system in countries which is applying VAT as the gap between the VAT expect and actual revenue, nowadays, are going to be higher. This thesis aims at the possible determinants such as real GDP growth, GDP per capita, GINI, final consumption expenditure of households, final consumption expenditure of households and non-profit institutions serving households, population, VAT on GDP, number of VAT rate, standard VAT rate, share of shadow economy, research and development expenditure, and corruption perception index to examine the VAT gap problem to see the importance of determinants for improving the issue. The research has been done by applying regression analysis on the EU countries in 2010 and 2018.

Abstract:

Value-added tax is the most significant indirect tax revenue for the state’s income and one of the most important tax policy tools. This tax, which spread rapidly to many countries, gave trade market participants the opportunity to find ways to avoid the Value Added Tax. This issue makes the governments doubt the reliability of the current Value Added Tax system in countries which is applying VAT as the gap between the VAT expect and actual revenue, nowadays, are going to be higher. This thesis aims at the possible determinants such as real GDP growth, GDP per capita, GINI, final consumption expenditure of households, final consumption expenditure of households and non-profit institutions serving households, population, VAT on GDP, number of VAT rate, standard VAT rate, share of shadow economy, research and development expenditure, and corruption perception index to examine the VAT gap problem to see the importance of determinants for improving the issue. The research has been done by applying regression analysis on the EU countries in 2010 and 2018.

Keywords

Tax evasion, Tax avoidance, Determinants of VAT gap

Keywords

Tax evasion, Tax avoidance, Determinants of VAT gap

Language used: English

Date on which the thesis was submitted / produced: 5. 9. 2021

Thesis defence

• Date of defence: 15. 9. 2021
• Supervisor: Hana Zídková
• Reader: Jana Tepperová

Vysoká škola ekonomická v Praze

Master programme:
Finance and Accounting