INNOVATIVE MECHANISMS FOR COUNTERACTION VAT EVASION: EUROPEAN EXPERIENCE AND WAYS OF DE-SHADOWING THE UKRAINIAN ECONOMY

Abstract

The problem of VAT evasion is becoming particularly relevant in Ukraine due to insufficiently effective control, the widespread use of schemes to understate tax liabilities, the presence of gaps in tax legislation, the adoption of economically inexpedient decisions by lawmakers, as well as the lack of clear interaction between tax authorities, customs authorities, and other government agencies. This article examines the complex problem of value added tax (VAT) evasion in Ukraine and the countries of the European Union. The purpose of this study is to conduct an in-depth comparative analysis of advanced European experience in combating tax evasion, as well as to develop effective, adapted mechanisms for maximizing tax revenues under the conditions of the modern Ukrainian economy. The author has analyzed in detail the key VAT evasion schemes, including smuggling, “tax twisting” schemes, the use of fictitious enterprises, and large-scale shadow cash transactions. It is proven that the total losses to the State Budget of Ukraine from these schemes are critical, reaching more than UAH 160 billion annually. Based on a study of successful European experience (in particular, countries such as Poland, Hungary, Italy, and Portugal), the article substantiates the pressing need to implement digital systems for the instant exchange of tax data, such as eVAT and SAF-T. The methodological basis of the study is scenario modeling (pessimistic, realistic, and optimistic scenarios) of the potential reduction of the VAT gap in Ukraine for the period 2026-2028. The scientific novelty of the study lies in demonstrating the need for a synergistic approach. It is proven that the implementation of the SAF-T system will yield the maximum fiscal effect only when combined with strict limitations on cash transactions and mandatory notarization of lease agreements for movable and immovable property. The introduction of these systems and tools will make it impossible to conceal digital anomalies with fictitious documents and will undermine the basis for the unlawful formation of tax credit, which in turn will promote the de-shadowing of the economy and an increase in tax revenues to the budget of Ukraine