Figure 1
Structure of tax revenue in Germany in 2016. Source: Own elaboration (based on Kassenmäßige Steuereinnahmen, 2017).
Figure 2
Structure of tax revenue in Poland in 2016. Source: Own elaboration (based on Analiza wykonania budżetu państwa 2017, p. 85).
Table 1
VR, VRR, and VAT rates in the EU-27
| EU Member State | VAT revenue | VRR (2014) | Tax rates (2014) | ||||
|---|---|---|---|---|---|---|---|
| A (2010) (million euros) | B(2014) (million euros) | C = (B – A)/A×100 (%) | A Standard (%) | B Average weighted (%) | C =A –B percentage points | ||
| Germany | 180213 | 203081 | 12.7 | 0.55 | 19.0 | 10.5 | 8.5 |
| United Kingdom | 113687 | 157428 | 38.5 | 0.44 | 20.0 | 9.2 | 10.8 |
| France | 135578 | 148129 | 9.3 | 0.48 | 19,6 | 9.8 | 9.8 |
| Italy | 97586 | 96897 | -0.7 | 0.37 | 22.0 | 10.1 | 11.9 |
| Spain | 57649 | 63756 | 10.6 | 0.41 | 21.0 | 8.6 | 12.4 |
| Netherlands | 42654 | 42708 | 0.1 | 0.48 | 21.0 | 10.1 | 10.9 |
| Sweden | 33825 | 38846 | 14.8 | 0.57 | 25.0 | 13.0 | 12.0 |
| Poland | 27466 | 29317 | 6.7 | 0.44 | 23.0 | 11.9 | 11.1 |
| Belgium | 25262 | 27518 | 8.9 | 0.47 | 21.0 | 9.8 | 11.2 |
| Austria | 22735 | 25445 | 11.9 | 0.59 | 20.0 | 11.3 | 8.7 |
| Denmark | 23040 | 24985 | 8.4 | 0.59 | 25.0 | 14.7 | 10.3 |
| Finland | 15533 | 18948 | 22.0 | 0.54 | 24.0 | 12.3 | 11.7 |
| Portugal | 13527 | 14672 | 8.5 | 0.48 | 23.0 | 11.4 | 11.6 |
| Greece | 15958 | 12676 | -20.6 | 0.37 | 23.0 | 10.6 | 12.4 |
| Romania | 9494 | 11650 | 22.7 | – | 24.0 | 17.6 | 6.4 |
| Czech Republic | 10420 | 11602 | 11.3 | 0.58 | 21.0 | 12.8 | 8.2 |
| Ireland | 10067 | 11498 | 14.2 | 0.49 | 23.0 | 11.2 | 11.8 |
| Hungary | 8442 | 9754 | 15.5 | 0.57 | 27.0 | 15.9 | 11.1 |
| Croatia | – | 5368 | – | – | 25.0 | 15.8 | 9.2 |
| Slovak Republic | 4182 | 5021 | 20.1 | 0.48 | 20.0 | 12.5 | 7.5 |
| Bulgaria | 3299 | 3799 | 15.2 | – | 20.0 | 14.4 | 5.6 |
| Luxembourg | 2600 | 3725 | 43.3 | 1.23 | 15.0 | 14.5 | 0.5 |
| Slovenia | 2926 | 3154 | 7.8 | 0.60 | 22.0 | 12.1 | 9.9 |
| Lithuania | 2180 | 2764 | 26.8 | – | 21.0 | 15.5 | 5.5 |
| Latvia | 1202 | 1787 | 48.7 | 0.51 | 20.0 | 12.6 | 7.4 |
| Estonia | 1257 | 1711 | 36.1 | 0.70 | 20.0 | 13.0 | 7.0 |
| Malta | 477 | 642 | 34.6 | – | 18.0 | 15.7 | 2.3 |
[i] Source: Own elaboration (based on Consumption Tax Trends, 2016, p. 118; TAXUD/2015/CC/131, 2016, pp. 12 and 68).
Table 2
VAT performance measures in Germany and Poland in the years 2007–2016
| Years | Germany | Poland | ||||
|---|---|---|---|---|---|---|
| VR (% GDP) | Efficiency ratio (%) | C-efficiency ratio (%) | VR (% GDP) | Efficiency ratio (%) | C-efficiency ratio (%) | |
| 2007 | 6.75 | 35.52 | 48.93 | 8.11 | 36.88 | 47.08 |
| 2008 | 6.87 | 36.16 | 49.42 | 7.91 | 35.97 | 44.75 |
| 2009 | 7.19 | 37.86 | 49.18 | 7.25 | 32.94 | 41.03 |
| 2010 | 6.98 | 36.73 | 48.85 | 7.46 | 33.93 | 42.05 |
| 2011 | 7.03 | 37.00 | 49.98 | 7.71 | 33.53 | 42.17 |
| 2012 | 7.06 | 37.14 | 49.78 | 7.36 | 32.02 | 40.30 |
| 2013 | 6.96 | 36.66 | 49.15 | 6.85 | 29.76 | 37.64 |
| 2014 | 6.95 | 36.56 | 49.60 | 7.23 | 31.42 | 40.18 |
| 2015 | 6.92 | 36.43 | 49.78 | 6.84 | 29.75 | 38.92 |
| 2016 | 6.93 | 36.46 | 49.75 | 6.84 | 29.73 | 38.86 |
[i] Source: Own calculation (based on the following: Inlandsproduktberechnung, 2017, p. 24; Kassenmäßige Steuereinnahmen, 2017; Analiza wykonania budżetu państwa, 2009, p. 50; 2011, p. 57; 2012, p. 58; 2016, p. 96; 2017, p. 85; Roczne wskaźniki makroekonomiczne, 2017). Both ratios, as a measure of VAT performance, were 1st applied by Ebrill et al. (2001, p. 41). According to these authors, the key difference between these ratios is that the former is normalized by reference to an income-type VAT and the latter, to a consumption type. Errors in the measurement of GDP may contaminate the 1st indicator. A more accurate measure of VAT collection efficiency is therefore the c-efficiency ratio. A c-efficiency ratio other than 100% indicates deviation from a single-rate tax on all private consumption. If it is lower, this may be a result of application of exemptions and reduced rates, tax arrears, and tax fraud; if it is higher, this may be caused by inclusion of investment in the VAT base.
Table 3
Selected VAT expenditures and miscellaneous VAT benefits in Germany and Poland in the years 2012–2014 (million euros)
| GERMANY | |||
|---|---|---|---|
| Category of VAT expenditures or miscellaneous VAT benefits | 2012 | 2013 | 2014 |
| VAT exemption for medical services | 13410 | 14710 | 15090 |
| VAT rate on cultural services and entertainment | 3455 | 3415 | 3440 |
| VAT rate on transport of people in urban and suburban areas | 1050 | 1120 | 1160 |
| VAT rate on accommodation services | 955 | 1060 | 1090 |
| VAT rate on orthopedic appliances, medical equipment for the disabled, swimming pool | 590 | 620 | 640 |
| services, and medicinal baths | |||
| VAT rate on activities specified in § 51– 68 of the Tax Ordinance Act | 325 | 335 | 335 |
| Other VAT preferences | 505 | 485 | 485 |
| Total VAT preferences | 20290 | 21745 | 22240 |
| POLAND | |||
| VAT rate on construction works in the residential housing sector | 2641 | 2668 | 2429 |
| VAT rate on pharmaceutical products | 1147 | 1197 | 1223 |
| VAT rate on meat and preserved meat products | 675 | 664 | 691 |
| VAT rate on restaurant services | 430 | 430 | 480 |
| VAT rate on transport of people in urban and suburban areas | 406 | 446 | 457 |
| VAT rate on dairy products | 420 | 444 | 392 |
| Other VAT preferences | 4302 | 4378 | 4641 |
| Total VAT preferences | 10021 | 10227 | 10314 |
[i] Source: Own elaboration (based on the following: Preferencje podatkowe w Polsce, 2013, p. 29; 2014, p. 30; 2015, p. 32; Fünfundzwanzigster Subventionsbericht, 2015, pp. 68–98).
Table 4
VAT policy gap in selected European Union Member States in 2014
| Country | Type of tax gap | ||
|---|---|---|---|
| Policy gap | Rate gap | Exemption gap | |
| Belgium | 53.68 | 12.40 | 41.28 |
| Denmark | 41.81 | 0.91 | 40.91 |
| France | 51.81 | 9.97 | 41.84 |
| Germany | 44.79 | 7.15 | 37.64 |
| Ireland | 51.83 | 17.08 | 34.75 |
| Malta | 12.41 | 12.72 | -0.31 |
| Poland | 49.06 | 15.86 | 33.20 |
| Spain | 59.00 | 14.51 | 44.49 |
| United Kingdom | 53.78 | 3.29 | 50.49 |
| EU-27 | 43.80 | 5.32 | 38.48 |
[i] Source: TAXUD/2015/CC/131, 2016, p. 53.
Table 5
VTTL, VR, and VAT gap in Germany and Poland in the years 2010–2014
| Country | Specification | Year | |||||
|---|---|---|---|---|---|---|---|
| 2010 | 2011 | 2012 | 2013 | 2014 | |||
| Germany | VTTL | million euros | 199390 | 213145 | 218749 | 221107 | 226570 |
| V (VTTL)% | – | 6.90 | 2.63 | 1.08 | 2.47 | ||
| VAT revenue | million euros | 180213 | 189910 | 194034 | 197005 | 203081 | |
| V (VAT revenue) % | – | 5.38 | 2.17 | 1.53 | 3.08 | ||
| VAT gap | million euros | 19177 | 23235 | 24715 | 24102 | 23489 | |
| V (VAT gap) % | – | 21.16 | 6.37 | –2.48 | –2.54 | ||
| VAT gap, as % of VTTL | 10% | 11% | 11% | 11% | 10% | ||
| Poland | VTTL | million euros | 32582 | 36526 | 37063 | 36834 | 38090 |
| V (VTTL) % | – | 12.11 | 1.47 | -0.62 | 3.41 | ||
| VAT revenue | million euros | 25863 | 28910 | 27406 | 27487 | 28916 | |
| V (VAT revenue) % | – | 11.78 | -5.20 | 0.29 | 5.20 | ||
| VAT gap | million euros | 6719 | 7615 | 9657 | 9348 | 9174 | |
| V (VAT gap) % | – | 13.34 | 26.81 | -3.20 | -1.86 | ||
| VAT gap, as % of VTTL | 21% | 21% | 26% | 25% | 24% | ||
[i] 1 euro = 4.2423 PLN, as on 04 August 2017.
VTTL – VAT total (theoretical) tax liability.
V (value) = (Vt2 – Vt1)/Vt1 × 100, where Vt2 represents the VTTL, VAT revenue, and VAT gap in year t2, and Vt1 represents the VTTL, VAT revenue and VAT gap in year t1.
Source: TAXUD/2015/CC/131, 2016, pp. 25 and 43.
Figure 3
VAT gap in the EU-27 in 2014 (% VTTL). Source: TAXUD/2015/CC/131, 2016, p. 16.