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Conference on VAT frauds in EU Member States and the competence of the EU Institutions Fiscal A Hungarian Perspective Brussels, 4 February, 2015 | Balázs.

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Presentation on theme: "Conference on VAT frauds in EU Member States and the competence of the EU Institutions Fiscal A Hungarian Perspective Brussels, 4 February, 2015 | Balázs."— Presentation transcript:

1 Conference on VAT frauds in EU Member States and the competence of the EU Institutions Fiscal A Hungarian Perspective Brussels, 4 February, 2015 | Balázs Romhányi

2 Lost VAT in % of total VAT liability Data from 2012 Update Report to the Study to quantify and analyse the VAT Gap in the EU-27 Member States - Table 3.1 VAT Gap estimates, 2011-2012

3 Indirect signs of VAT-fraud A implies B B is true A is more likely

4 % of VAT Total Tax Liability 2000200520112012 Austria9%11%13%12% Belgium9%13%12%10% Bulgaria23%10%24%20% Czech Republic30%10%17%22% Germany11%13%10% Denmark11%9%8% Estonia13%14% Spain6%1%19%18% Finland12% 5% France11%14% 15% Greece25%31%38%33% Hungary22%27%24%25% Ireland9%7%12%11% Italy23%38%32%33% Latvia16%15%36% Luxemburg15%9%5%6% Lithuania30%36%37%34% Malta17%9%29%31% Netherlands9%3%4%5% Poland17%9%19%25% Portugal3% 11%8% Romania42%34%44% Sweden6%4% 7% Slovenia4%5%9% Slovakia27%20%33%39% United Kingdom12%11%10% EU-26 16% Hungary loses 3 billion EUR a year due to VAT non-compliance Achieveing lowering the loss to the average of the EU-26 means 1 billion EUR (1% of GDP) plus in revenues

5 Don Giovannis of the trade register Company fluctuation Number of all companies Founded/ defunct companies per year Administrative services34 87126,4% Other services26 65422,3% Tourism30 82722,0% Construction55 54421,8% Energy60821,3% Real estate29 80721,1% Education27 03520,4% Commerce133 86619,9% Other sectors295 56915,0% Data source: Hungarian Central Statistical Office

6 L’art pour l’art, trade for trade Estimation based on input-output tables Industry Export as % of (Output plus Import) in 2005 Export as % of (Output plus Import) in 2010 Lost VAT (billion HUF) Wholesale trade20,234,178,4 Other business services9,916,048,5 Entertainment, culture, sport3,021,644,9 Food, drinks, tobacco manufacturing 20,827,744,5 Agriculture16,125,641,0 Chemicals, drugs37,041,531,9 Rent, operative leasing11,426,128,8 Other sectors with increasing export 24,6 214,9 Sum22,826,0532,8 Data source: Hungarian Central Statistical Office

7 billion HUF20082009201120122013 Oil Export from foreign trade 40,440,268,485,476,9 Export of industrial companies 43,540,567,788,277,2 Difference -3,1-0,40,7-2,8-0,3 Sugar Export from foreign trade 27,023,251,063,640,2 Export of industrial companies 9,68,110,117,113,0 Difference 17,415,140,946,527,2 Chocolate and sweets Export from foreign trade 17,315,521,126,439,3 Export of industrial companies 12,616,521,727,630,2 Difference 4,7-1,0-0,6-1,39,2 Milk Export from foreign trade 26,922,645,944,851,9 Export of industrial companies 1,85,48,96,67,3 Difference 25,117,137,038,244,6 Coffee, tea Export from foreign trade 20,815,725,325,522,9 Export of industrial companies 22,316,722,523,018,2 Difference -1,6-1,02,82,64,7

8 News in the data, news out of the data Export by producers and export at the border Export from foreign tradeExport of industrial companies In billion HUF Data source: Hungarian Central Statistical Office

9 Potential measures Enhancing risk management at the birth of the companies – Integrated databases of existing tax and company data E-invoicing across all countries for easier following of the trades – Not allowing breaking the VAT-chain at the borders Strict physical checks of exported goods Incentives – Bonus for companies adopting the measures – Malus for non-complying companies

10 Thank you for your attention


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