Mandatory Transaction-Based Reporting and the VAT Compliance Gap: Evidence from EU Member States

The European Union has mandated digital reporting of cross-border VAT transactions from 2030, yet quasi-experimental evidence on the official compliance gap remains limited and does not cover the full range of national transaction-reporting architectures. This paper estimates their effect on that gap in 24 member states over 2000 to 2023, coding twelve mandates from the underlying legal instruments and applying the Callaway and Sant’Anna framework with never-treated comparisons. The baseline staggered estimate indicates a 4.23 percentage point reduction (95% CI [−6.45, −1.83]), remaining between 3.73 and 5.43 points across nineteen specifications including an imputation estimator and a neighbour-excluding comparison, and 2.76 under the most conservative identification check. Point estimates more than triple over five years. Pre-adoption coefficients are individually indistinguishable from zero though jointly significant, and formal sensitivity analysis shows the adoption-year and average post-adoption effects withstand modest though not large parallel-trend violations. The results do not show continuous reporting outperforms periodic reporting, and exploratory analysis detects no capacity moderation. What orders the cohort estimates is the completeness of the obligation, since the three mandates reaching one side of the transaction or part of the taxpayer population produce the three weakest effects. Findings support the fiscal premise of the VAT in the Digital Age reform and counsel patient evaluation of the rollout.