This week’s tax map shows the number of hours it takes businesses across Europe to comply with the Value-Added Tax. The Value-Added Tax (VAT) is considered one of the most efficient and neutral forms of taxation. When designed with a low rate and a broad tax base, it limits economic distortions while raising sufficient tax revenue. However, complying with the VAT can be complex due to provisions such as reporting and invoice disclosure obligations, requiring businesses to devote resources to tax compliance instead of other productive activities. One way of estimating the VAT’s administrative burden is to measure the number of hours in a year it takes businesses to comply with the tax. The time to comply indicator reflects the average number of hours it takes a medium-size business per year to prepare, file, and pay VAT, as measured by PwC’s “Paying Taxes 2018” component of the “Doing Business” report from the World Bank. When comparing VAT compliance times across Europe, it is important to keep in mind that the methodology used to calculate this indicator is based on certain assumptions and simplifications, making it an approximation rather than a precise measure. Switzerland’s VAT compliance takes the least amount of time in Europe, at eight hours, followed by 14 hours in Estonia and 22 hours in Luxembourg. In contrast, complying with the VAT requires the most amount of time in the Czech Republic (108 hours), Poland (98 hours), and Hungary (96 hours). While efficiency plays an essential role when designing tax policies, simplicity and transparency are also important. As this series on tax complexity has shown, the administrative burden put on businesses to comply with corporate, labor, and consumption taxes is relatively high in some European countries, imposing costs on businesses and the economy. These costs could be avoided or minimized through better tax administration policies or systems. VAT Complexity Source: Tax Foundation’s International Tax Competitiveness Index. (Measures are based on PwC’s “Paying Taxes 2018” component of the “Doing Business” report from the World Bank.) Country Hours Needed to Comply with the VAT per Year Austria 35 Belgium 75 Czech Republic 108 Denmark 40 Estonia 14 Finland 24 France 31 Germany 43 Greece 69 Hungary 96 Iceland 40 Ireland 30 Italy 30 Latvia 66 Luxembourg 22 Netherlands 34 Norway 44 Poland 98 Portugal 90 Slovak Republic 84 Slovenia 69 Spain 35 Sweden 36 Switzerland 8 Turkey 91 United Kingdom 25 Note: This is part of a map series in which we examine tax complexity in Europe Complexity of Labor Taxes in Europe Complexity of the Corporate Income Tax in Europe International Tax Competitiveness Index Stay Updated on Tax Issues Around the World Select Country United States Aaland Islands Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua And Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bonaire, Saint Eustatius and Saba Bosnia and Herzegovina Botswana Bouvet Island Brazil British Indian Ocean Territory Brunei Darussalam Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos (Keeling) Islands Colombia Comoros Congo Cook Islands Costa Rica Cote D'Ivoire Croatia Cuba Curacao Cyprus Czech Republic Democratic Republic of the Congo Denmark Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard and Mc Donald Islands Honduras Hong Kong Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey (Channel Islands) Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Lao People's Democratic Republic Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Mexico Federated States of Micronesia Republic of Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar Namibia Nauru Nepal Netherlands Netherlands Antilles New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island North Korea Northern Mariana Islands Norway Oman Pakistan Palau Palestine Panama Papua New Guinea Paraguay Peru Philippines Pitcairn Poland Portugal Puerto Rico Qatar Republic of Kosovo Reunion Romania Russia Rwanda Saint Kitts and Nevis Saint Lucia Saint Martin Saint Vincent and the Grenadines Samoa (Independent) San Marino Sao Tome and Principe Saudi Arabia Senegal Serbia Seychelles Sierra Leone Singapore Sint Maarten Slovak Republic Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Korea South Sudan Spain Sri Lanka St. Helena St. Pierre and Miquelon Sudan Suriname Svalbard and Jan Mayen Islands Swaziland Sweden Switzerland Syria Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks & Caicos Islands Turks and Caicos Islands Tuvalu Uganda Ukraine United Arab Emirates United Kingdom Uruguay USA Minor Outlying Islands Uzbekistan Vanuatu Vatican City State (Holy See) Venezuela Vietnam Virgin Islands (British) Virgin Islands (U.S.) Wallis and Futuna Islands Western Sahara Yemen Zambia Zimbabwe Email + Advertising By subscribing, you agree to be contacted by the Tax Foundation. 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