Vat revenue in the times of economic shocks and structural changes (comparative analysis of France, Germany and Poland)

Abstract

Purpose: This paper aims to compare VAT performance in France, Germany and Poland. The first part provides an insight into VAT design in these countries. The objective of the second—is to compare selected indicators, and that of the last—is to evaluate the recent changes implemented in the VAT system to improve its efficiency.

Design/methodology/approach: The article uses a range of comparative legal methods (historical, structural and functional). It examines VAT performance based on indicators such as the C-efficiency ratio, the VRR or the VAT gap. The final part of the article is devoted to assessing the challenges that governments face and the reform measures that need to be taken to improve VAT efficiency.

Findings: Despite an advanced level of VAT harmonisation, significant differences in its functioning between Member States have a notable impact on the performance of this tax. For many years, VAT performance has been relatively higher in Germany than in France and Poland. Indeed, France and Poland are countries where performance indicators are below the EU average. On the other hand, in Germany, they are around this average.

Originality/value: The article examines the performance of VAT, a topic usually discussed using the example of a single country or groups of EU member states, taking into account statistical data from Eurostat. However, it is rare for authors to analyse this issue by focusing on a few countries, while taking into account original legal sources, national statistical data, reports and literature. This publication does just that. Three countries were selected: Germany, France and Poland and their choice being based on various legal and historical aspects.