Romania, champion in the non-collection of taxes in the EU: loses a third of both VAT and profit tax. Effects
Ruxandra Târlescu Photo: PwC Romania
Champion for a decade in the non-collection of VAT, according to European Commission reports, Romania is also in first place in the non-collection of profit tax, the same institution shows in an analysis published for the first time on December 11, 2025.
The new report estimates that Romania did not collect about 35% of the estimated profit tax for 2019 – the year analyzed by the report -, with a non-collection rate three times higher than the average rate estimated at 10.9% of the 23 EU member states included in the analysis. The biggest gaps were registered in Romania, Slovakia, Poland and Italy, and the smallest (below 3%) in Denmark, the Netherlands and Finland.
According to the report, in Romania, Slovakia, Poland and Italy, the profit tax collection gap is mainly due to tax evasion. In other countries, such as Denmark, Finland, Sweden, Austria and France, the erosion of the tax base and the transfer of profits to other jurisdictions is the main cause affecting the revenues of national budgets.
“Romania's fiscal-budgetary situation has become critical due to the accumulated problems: the lack of predictability through frequent legislative changes, unsustainable public spending and delays in the digitalization of the tax administration. The effects felt by taxpayers are fiscal inequity and difficult-to-finance deficits that attract tax increases. The amounts collected by the budget last year were 36 billion lei from profit tax and 121 billion lei from VAT, while the budget deficit was over 152 billion lei. It is certain that a better collection would have had a visible impact, in the order of billions for the budget. Therefore, the acceleration of the use of digital technologies and Artificial Intelligence are important directions to achieve results in the collection. Budgetary problems cannot be solved using the lever of increasing taxes for the economic environment, and finally, a weak economic growth with including impact on budget revenues”, said Ruxandra Târlescu, PwC Romania Fiscal Services Coordinating Partner.
Romania continues to be the first in the EU in non-collection of VAT
Romania remains in first place in the European Union in terms of non-collection of VAT, having lost around 30% of potential VAT revenues due to non-compliance by taxpayers, compared to an average loss of 9.5% for all 27 member states, according to the annual report published by the European Commission. The report estimates that the gap represents around 9 billion euros.
According to the reports of the European Commission, starting from 2015, Romania occupied the first place, every year, among the member states, having the biggest gap in VAT.
After Romania, the highest VAT gaps were recorded in Malta (24.2%), Poland (16%), Lithuania (15.1%) and Italy (15%). At the opposite pole, Austria reported the lowest VAT collection deficit of 1%.
Article supported by PwC Romania
