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Taxation andCustoms Union

Data for the EU Member States, Iceland and Norway

Taxation Trends in the European Union

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Luxembourg: Publications Office of the European Union, 2016

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Taxation Trends in the European Union

DATA FOR THE EU MEMBER STATES, ICELAND AND NORWAY 2016 edition

DG Taxation and Customs Union

Taxation trends in the European Union 3DG Taxation and Customs Union |

PrefaceMore than ever, tax policies and are under scrutiny, not only for their impact on businesses and the economy, but also for their effects on public finances, public services and ordinary citizens. To develop good tax policies, and to better understand existing policies, it is essential to have high quality data and comparable information about tax systems. This is the aim of Taxation Trends in the European Union which provides an overview of trends in taxation revenues, tax structures and reforms over recent years.

The 2016 edition of Taxation Trends is based upon harmonized and comparable taxation data from the National Statistical Institutes, transmitted to Eurostat and validated by Eurostat, and uses the government finance statistics as well as the more detailed National Tax Lists for each country. The statistics are based on the European System of National and Regional Accounts (ESA 2010), which is a major development of the previous system (ESA95). Progress has been achieved in the harmonisation of methodology and in the precision and accuracy of the concepts, definitions, classifications and accounting rules.

The report also draws upon valuable contributions from experts of the Ministries of Finance in all the countries covered by the report, including some additional data. We would like to express our special thanks for their many inputs and help without which the report would not have been possible.

In addition to the analysis of Europe-wide trends in Part 1, the report also includes a Part 2 with country chapters covering the 28 EU Member States, Iceland and Norway. For each country, key taxation indicators are provided on tax revenues as a percentage of GDP for the years 2002 to 2014. These are supplemented by factual tables presenting the latest tax reforms in each country and the main features of the national tax systems for personal and corporate taxes, VAT, social contributions and wealth and transaction taxes. In Annex A, the reader can find more than 80 tables of the various taxation indicators, while Annex B contains a detailed description of the methodology used to calculate the indicators.

The data and information from this report, as well as other materials, can be found on the Economic Analysis web pages of DG Taxation and Customs Union. Finally, the Taxes in Europe database contains detailed and updated information on the most important taxes in force in the EU Member States.

Stephen Quest

Director-General

Directorate-General for Taxation and Customs Union

http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/index_en.htmhttps://ec.europa.eu/taxation_customs/taxes-europe-database-tedb_en

Taxation trends in the European Union4 | DG Taxation and Customs Union

Background informationTaxation trends in the European Union is produced by the Directorate-General for Taxation and Customs Union (DG TAXUD).

The Commission staff wishes to thank the Working Group on the Structures of the Taxation Systems, composed of experts from the national Finance Ministries and run by DG TAXUD, for their very helpful oral and written contributions to the report. Nevertheless, the Commission Services bear sole responsibility for this publication and its content. This report does not necessarily reflect the views of the tax departments in the Member States.

Any questions or suggestions relating to the analysis should be addressed to:

Gatan Nicodme, Head of the unit Economic analysis, evaluation & impact assessment support European Commission, DG Taxation and Customs Union, B-1049 Brussels Email: [email protected]

Language and disseminationTaxation trends in the European Union is available in English only. The publication can be downloaded free of charge from the websites of the Directorate-General for Taxation and Customs Union (http://ec.europa.eu/taxtrends). The paper version can be purchased from any of the sales outlets listed on the website of the Publications Office of the European Union (http://publications.europa.eu).

Additional informationThe National Tax Lists for all EU countries, showing tax revenues for all major taxes, will be published online (see the sites Economic analysis of taxation and Statistics Explained). Continuously updated tax data are also available on the Eurostat website (online data code: gov_10a_taxag). Readers interested in taxation can find detailed information on the legal form and revenue of the taxes currently in force in the EU Member States in the Taxes in Europe database (TEDB).

mailto:[email protected]://ec.europa.eu/taxtrendshttp://publications.europa.euhttp://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/index_en.htmhttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Tax_revenue_statisticshttp://ec.europa.eu/eurostat/data/databasehttp://ec.europa.eu/tedb


AcknowledgementsThis report was prepared under the direction of Stephen Quest (Director General of DG TAXUD), Valre Moutarlier (Director at DG TAXUD) and Gatan Nicodme (Head of Unit at DG TAXUD).

The main editor of the report was Brian Sloan with contributions from Ccile Denis, Thomas Hemmelgarn and Luis Peragon Lorenzo (DG TAXUD).

Special contributions were provided by the European Semester country desks in DG TAXUD: Maksim Baranov, Reinhard Biebel, Ann-Marie Bruhn, Alain Clara, Ivana Cordasev, Ccile Denis, Eduard Folch Sogas, Galle Garnier, Roberta Grappiolo, Valeska Groenert, Morgan Guillou, Fredrika Johansson, Ursula Krampe, Arne Kubitza, Bertrand Lapalus, Beatriz Laranjeira, Stephen Lawson, Federica Liberatore, Juan Lopez Rodriguez, Constantino Lanza, Konstantin Lozev, Lucian Luca, Milena Math, Pia Michelsen, Ioanna Mitroyanni, Rosalind Moss, Carmen Muniz Sanchez, Colin ODriscoll, David OSullivan, Ela Olkuska, Martins Ozolins, Henrik Paulander, Luis Peragon Lorenzo, Tanel Petsep, Savino Rua, Barbara Schmitt-Kischel, Peter Schonewille, Vladimir Sika, Aga Skonieczna, Brian Sloan, Maria Teresa Sutich, Szabolcs Szilagyi, Bogdan-Alexandru Tasnadi, Luisa Tivrisi, Linda Traversa, Emer Traynor, Tina Tukic, Ivar Tuominen, Pierre Vandenberghe, Frank Van Driessche, Astrid Van Mierlo, Aurimas Vasylis, Gyongyi Vegh, Antonio Victoria Sanchez and Vassil Zhivkov.

Editorial assistance was provided by Petra Harvanova, Tatjana Lapunova and Stphanie Veys (DG TAXUD).

The report also benefited from the contributions and suggestions of the Working Group on the Structures of the Taxation Systems, composed of experts from the national Finance Ministries, as well as comments by colleagues from other services of the European Commission.


Contents

Preface 3

Background information 4

Acknowledgements 5

Abbreviations 12

Introduction 13

1 Development of the overall tax revenue in the European Union 15

Level and long-term trends ............................................................................................................................................................................................16

Revenue structure by type of tax ................................................................................................................................................................................20

Distribution of the tax burden by type of tax base..........................................................................................................................................20

Taxation of consumption .................................................................................................................................................................................................22

Taxation of labour .................................................................................................................................................................................................................26

Taxation of capital .................................................................................................................................................................................................................32

Environmental taxation .....................................................................................................................................................................................................36

Property Taxes .........................................................................................................................................................................................................................39

Payable tax credits ................................................................................................................................................................................................................39

2 National tax systems: Structure and recent developments 43

Austria ..........................................................................................................................................................................................................................................44

Belgium .......................................................................................................................................................................................................................................50

Bulgaria........................................................................................................................................................................................................................................56

Croatia ..........................................................................................................................................................................................................................................61

Cyprus ..........................................................................................................................................................................................................................................66

Czech Republic .......................................................................................................................................................................................................................71

Denmark .....................................................................................................................................................................................................................................76

Estonia .........................................................................................................................................................................................................................................82

Finland .........................................................................................................................................................................................................................................87

France ...........................................................................................................................................................................................................................................92

Germany .....................................................................................................................................................................................................................................97

Greece .......................................................................................................................................................................................................................................102

Hungary ...................................................................................................................................................................................................................................107

Ireland .......................................................................................................................................................................................................................................112

Italy..............................................................................................................................................................................................................................................117

Latvia..........................................................................................................................................................................................................................................123

Lithuania ..................................................................................................................................................................................................................................128

Luxembourg..........................................................................................................................................................................................................................133

Malta ..........................................................................................................................................................................................................................................139

Netherlands ...........................................................................................................................................................................................................................145

Poland .......................................................................................................................................................................................................................................150

Portugal ....................................................................................................................................................................................................................................155


Romania ...................................................................................................................................................................................................................................160

Slovakia ....................................................................................................................................................................................................................................165

Slovenia ....................................................................................................................................................................................................................................171

Spain ..........................................................................................................................................................................................................................................176

Sweden ....................................................................................................................................................................................................................................181

United Kingdom .................................................................................................................................................................................................................186

European Union ..................................................................................................................................................................................................................192

Euro area ..................................................................................................................................................................................................................................194

Iceland ......................................................................................................................................................................................................................................196

Norway .....................................................................................................................................................................................................................................201

3 Annex A: Tables 207

4 Annex B: Methodological and explanatory notes 293

Part A: Tax structure by tax type ................................................................................................................................................................................296

Part B: Tax structure by level of government ....................................................................................................................................................299

Part C: Tax structure by type of tax base ..............................................................................................................................................................299

Part D: Environmental Taxes ........................................................................................................................................................................................304

Part E: Property taxes .......................................................................................................................................................................................................307

Part F: Implicit tax rates, split of personal income tax revenues and average effective tax rate.......................................308

Bibliography 336


List of tables and graphsTable 1: VAT rates in the EU Member States, 2001-2016 ........................................................................................................................................24

Table 2: Top statutory personal income tax rates ....................................................................................................................................................30

Table 3: Tax wedges for a single worker with 67% of average earnings, no children .......................................................................32

Table 4: Top statutory corporate income tax rates .................................................................................................................................................34

Table 5: Payable tax credits ...................................................................................................................................................................................................42

Table 6: Effect of treatment of payable tax credits on total tax revenue indicators ..........................................................................42

Table F.1: Personal income tax revenue allocated to employed labour income .............................................................................330

Table F.2: Personal income tax revenue allocated to income of the self-employed .....................................................................331

Table F.3: Personal income tax revenue allocated to social transfers and pensions .....................................................................332

Table F.4: Personal income tax revenue allocated to capital income .....................................................................................................333

Graph 1: Tax revenue .................................................................................................................................................................................................................16

Graph 2: Tax revenue, EU-28 and EA-19, 2002-2014 ................................................................................................................................................17

Graph 3: Tax revenue ................................................................................................................................................................................................................17

Graph 4: Revenue structure by level of government, 2014 ..............................................................................................................................18

Graph 5: Structure of tax revenues by major type of taxes, 2014 .................................................................................................................19

Graph 6: Distribution of the total tax burden according to type of tax base 2014 ............................................................................21

Graph 7: Implicit tax rate on consumption, 1995-2014 ......................................................................................................................................22

Graph 8: Decomposition of the ITR on consumption 2014 .............................................................................................................................22

Graph 9: Development of average standard VAT rate, EU-28, 2000-2016 ................................................................................................23

Graph 10: Implicit tax rate on labour, 2002-2014 ....................................................................................................................................................26

Graph 11: Development of top personal income tax rate, 1995-2016 ......................................................................................................27

Graph 12: Composition of the implicit tax rate on labour, 2014 ...................................................................................................................28

Graph 13: Evolution of the composition of the implicit tax rate on labour, 2004-2014 .................................................................28

Graph 14: Tax wedges for a single worker with 67% of average earnings, no children ..................................................................29

Graph 15: Corporate income tax revenues, 2002-2014 ......................................................................................................................................33

Graph 16: Corporate income tax rates and average effective taxation indicators, 2000-2016 ...................................................33

Graph 17: Environmental tax revenues, 2000-2014 ...............................................................................................................................................36

Graph 18: Evolution of the structure of environmental taxes, 2004-2014 ...............................................................................................37

Graph 19: Energy tax revenues in relation to final energy consumption ................................................................................................38

Graph 20: Energy tax revenues by Member State, 2014 .....................................................................................................................................38

Graph 21: Composition of property taxes by Member State, 2014 .............................................................................................................39

Graph 22: Size of payable tax credits ..............................................................................................................................................................................41

Graph A.1: Sensitivity analysis: role of imputed social contributions and voluntary actual social contributions ........297


List of tables in Annex ATable 1: Total taxes (including compulsory actual social contributions) as % of GDP .....................................................................208

Table 2: Total taxes (excluding social contributions) as % of GDP ................................................................................................................209

Table 3: Indirect taxes as % of GDP - Total ...................................................................................................................................................................210

Table 4: Indirect taxes as % of total taxation - Total ...............................................................................................................................................211

Table 5: Indirect taxes as % of GDP - VAT ......................................................................................................................................................................212

Table 6: Indirect taxes as % of total taxation - VAT ..................................................................................................................................................213

Table 7: Indirect taxes as % of GDP - Taxes and duties on imports excluding VAT.............................................................................214

Table 8: Indirect taxes as % of total taxation - Taxes and duties on imports excluding VAT.........................................................215

Table 9: Indirect taxes as % of GDP - Taxes on products, except VAT and import duties ...............................................................216

Table 10: Indirect taxes as % of total taxation - Taxes on products, except VAT and import duties ........................................217

Table 11: Indirect taxes as % of GDP - Other taxes on production ..............................................................................................................218

Table 12: Indirect taxes as % of total taxation - Other taxes on production ..........................................................................................219

Table 13: Direct taxes as % of GDP - Total ....................................................................................................................................................................220

Table 14: Direct taxes as % of total taxation - Total ................................................................................................................................................221

Table 15: Direct taxes as % of GDP - Personal income taxes ............................................................................................................................222

Table 16: Direct taxes as % of total taxation - Personal income taxes ........................................................................................................223

Table 17: Direct taxes as % of GDP - Corporate income tax .............................................................................................................................224

Table 18: Direct taxes as % of total taxation - Corporate income tax .........................................................................................................225

Table 19: Direct taxes as % of GDP - Other .................................................................................................................................................................226

Table 20: Direct taxes as % of total taxation - Other .............................................................................................................................................227

Table 21: Social contributions as % of GDP - Total (compulsory actual contributions) ..................................................................228

Table 22: Social contributions as % of total taxation - Total (compulsory actual contributions) ..............................................229

Table 23: Social contributions as % of GDP - Employers (compulsory actual contributions) .....................................................230

Table 24: Social contributions as % of total taxation - Employers (compulsory actual contributions) .................................231

Table 25: Social contributions as % of GDP - Households (compulsory actual contributions) ..................................................232

Table 26: Social contributions as % of total taxation - Households (compulsory actual contributions)..............................233

Table 27: Capital transfers (representing taxes assessed but unlikely to be collected) as % of GDP ......................................234

Table 28: Capital transfers (representing taxes assessed but unlikely to be collected) as % of total taxation ..................235

Table 29: Taxes received by level of government as % of GDP - Central government ....................................................................236

Table 30: Taxes received by level of government as % of total taxation - Central government ................................................237

Table 31: Taxes received by level of government as % of GDP - State government .........................................................................238

Table 32: Taxes received by level of government as % of total taxation - State government.....................................................239

Table 33: Taxes received by level of government as % of GDP - Local government ........................................................................240

Table 34: Taxes received by level of government as % of total taxation - Local government ....................................................241

Table 35: Taxes received by level of government as % of GDP - Social security funds ...................................................................242

Table 36: Taxes received by level of government as % of total taxation - Social security funds ...............................................243

Table 37: Taxes received by level of government as % of GDP - EU Institutions .................................................................................244


Table 38: Taxes received by level of government as % of total taxation - EU Institutions .............................................................245

Table 39: Taxes on consumption as % of GDP - Total ...........................................................................................................................................246

Table 40: Taxes on consumption as % of total taxation - Total .......................................................................................................................247

Table 41: Taxes on consumption as % of GDP - Tobacco and alcohol.......................................................................................................248

Table 42: Taxes on consumption as % of total taxation - Tobacco and alcohol...................................................................................249

Table 43: Taxes on labour as % of GDP - Total ...........................................................................................................................................................250

Table 44: Taxes on labour as % of total taxation - Total .......................................................................................................................................251

Table 45: Taxes on labour as % of GDP - Income from employment .........................................................................................................252

Table 46: Taxes on labour as % of total taxation - Income from employment .....................................................................................253

Table 47: Taxes on labour as % of GDP - Income from employment, paid by employers.............................................................254

Table 48: Taxes on labour as % of total taxation - Income from employment, paid by employers.........................................255

Table 49: Taxes on labour as % of GDP - Income from employment, paid by employees ...........................................................256

Table 50: Taxes on labour as % of total taxation - Income from employment, paid by employees .......................................257

Table 51: Taxes on labour as % of GDP - Income from employment, paid by non-employed ..................................................258

Table 52: Taxes on labour as % of total taxation - Income from employment, paid by non-employed ..............................259

Table 53: Taxes on capital as % of GDP - Total ...........................................................................................................................................................260

Table 54: Taxes on capital as % of total taxation - Total .......................................................................................................................................261

Table 55: Taxes on capital as % of GDP - Income of corporations ................................................................................................................262

Table 56: Taxes on capital as % of total taxation - Income of corporations ............................................................................................263

Table 57: Taxes on capital as % of GDP - Income of households ..................................................................................................................264

Table 58: Taxes on capital as % of total taxation - Income of households ..............................................................................................265

Table 59: Taxes on capital as % of GDP - Income of self-employed ............................................................................................................266

Table 60: Taxes on capital as % of total taxation - Income of self-employed ........................................................................................267

Table 61: Taxes on capital as % of GDP - Stock of capital ...................................................................................................................................268

Table 62: Taxes on capital as % of total taxation - Stock of capital ...............................................................................................................269

Table 63: Environmental taxes as % of GDP - Total ................................................................................................................................................270

Table 64: Environmental taxes as % of total taxation - Total ............................................................................................................................271

Table 65: Environmental taxes as % of GDP - Taxes on energy ......................................................................................................................272

Table 66: Environmental taxes as % of total taxation - Taxes on energy ..................................................................................................273

Table 67: Environmental taxes as % of GDP - Taxes on energy, of which transport fuel taxes ...................................................274

Table 68: Environmental taxes as % of total taxation - Taxes on energy, of which transport fuel taxes ...............................275

Table 69: Environmental taxes as % of GDP - Transport taxes (excluding fuel taxes) .......................................................................276

Table 70: Environmental taxes as % of total taxation - Transport taxes (excluding fuel taxes) ...................................................277

Table 71: Environmental taxes as % of GDP - Taxes on pollution and resources ................................................................................278

Table 72: Environmental taxes as % of total taxation - Taxes on pollution and resources ............................................................279

Table 73: Taxes on property as % of GDP - Total ......................................................................................................................................................280

Table 74: Taxes on property as % of total taxation - Total ..................................................................................................................................281

Table 75: Taxes on property as % of GDP - Recurrent taxes on immovable property .....................................................................282

Table 76: Taxes on property as % of total taxation - Recurrent taxes on immovable property .................................................283


Table 77: Taxes on property as % of GDP - Other taxes on property ....................................................................................................................284

Table 78: Taxes on property as % of total taxation - Other taxes on property ................................................................................................285

Table 79: Implicit tax rate on consumption, % ...................................................................................................................................................................286

Table 80: Implicit tax rate on labour, % ...................................................................................................................................................................................287

Table 81: Implicit tax rate on energy (1) ..................................................................................................................................................................................288

Table 82: Implicit tax rate on energy, deflated (1) .............................................................................................................................................................289

Table 83: Total payable tax credits as % of GDP .................................................................................................................................................................290

Table 84: Transfer component of payable tax credits as % of GDP ........................................................................................................................291

Table 85: Effective average tax rates, non-financial sector, % ...................................................................................................................................292


AbbreviationsCountry abbreviations Commonly used acronyms

BE Belgium EU European Union

BG Bulgaria EMU Economic and Monetary Union

CZ Czech Republic

DK Denmark MS Member State

DE Germany EU-28 European Union (BE, BG CZ, DK, DE, EE, IE, EL, ES, FR, HR, IT, CY, LV, LT, LU, HU, MT, NL, AT, PL, PT, RO, SI, SK, FI, SE, UK)

EE Estonia EU-27 European Union (BE, BG CZ, DK, DE, EE, IE, EL, ES, FR, IT, CY, LV, LT, LU, HU, MT, NL, AT, PL, PT, RO, SI, SK, FI, SE, UK)

IE Ireland EA-19 Euro area (BE, DE, IE, EE, EL, ES, FR, IT, CY, LV, LT, LU, MT, NL, AT, PT, SI, SK, FI)

EL Greece EA-18 Euro area (BE, DE, IE, EE, EL, ES, FR, IT, CY, LV, LU, MT, NL, AT, PT, SI, SK, FI)

ES Spain

FR France

HR Croatia

IT Italy ECSC European Coal and Steel Community

CY Cyprus EEA European Economic Area

LV Latvia

LT Lithuania PIT Personal Income Tax

LU Luxembourg CIT Corporate Income Tax

HU Hungary EATR Effective Average Tax Rate

MT Malta ESA79 European System of Accounts 1979

NL Netherlands ESA95 European System of Accounts 1995

AT Austria ESA2010 European System of Accounts 2010

PL Poland GDP Gross Domestic Product

PT Portugal ITR Implicit Tax Rate

RO Romania VAT Value Added Tax

SI Slovenia NTL National Tax List

SK Slovakia

FI Finland : Not available

SE Sweden na Not applicable

UK United Kingdom pp Percentage points

IS Iceland (EEA member)

NO Norway (EEA member)


IntroductionTaxation Trends in the EU presents taxation data and information for the twenty-eight Member States, Iceland and Norway. The 2016 edition is bigger than last years report due to the re-introduction of several popular elements which featured in earlier editions.

The Part 1 analysis of developments in the EU re-appears, outlining with graphs and tables the main trends in taxation indicators at the EU level. It summarizes the main figures presented in the report, and also provides data on top personal and corporate statutory tax rate developments, on effective average tax rates and on the so-called tax wedge.

This is followed by the country chapters in Part 2 which, for each of the 30 countries covered in the report, present:

A summary table of the countrys tax revenues (more detailed this year than last) covering revenues from direct and indirect taxes, social contributions etc., as well as revenues by economic function (consumption, capital, labour taxes). Indicators of revenues from energy, environmental and property taxes as well as implicit tax rates are also included.

The latest tax reforms announced or introduced in the period since the last report (up to end of April 2016). The reforms are categorized by type of measure (VAT, CIT, PIT, etc.) and a brief description is provided along with the direction of change of the reform (base increase/decrease, rate increase/decrease).

A set of tables providing a snapshot of the main features of the national tax system (personal and corporate taxes, VAT, social contributions and wealth and transaction taxes). The content of these tables reflects the legislation in place on 1 January 2016, unless otherwise indicated.

The detailed statistical annexes (Annex A) also re-appear in this years report. They include detailed datasets for the main national accounts headings (direct, indirect taxes, social contributions etc.) and by economic function (consumption, capital, labour taxes), as well as energy, environmental and property taxes and implicit tax rates. These more than 80 tables were not included in the 2015 edition for reasons of timing related to the implementation of the new national accounts system. The cut-off date for most of the data in this report was 12 February 2016. This concerns the National Accounts data and the more disaggregated tax data submitted to Eurostat (the National Tax Lists) which were used for calculating revenues by economic functions as well as levels of environmental and property taxes. Some updated data were used in the tables relating to tax revenues by level of government (1 June 2016).

The methodological annex has been updated and re-introduced at the end of the report in Annex B. This provides detailed guidance on the methodology used for all the calculations carried out for the Taxation Trends publication.

As a complement to this report, the DG TAXUD website, dedicated to the economic analysis of taxation, enables users to download the information contained in Taxation Trends, as well as a pdf version of the report itself. The site also provides links to numerous other sources of data, information and analytical reports in the field of taxation. More extensive information provided by national Finance Ministries on their tax systems is available on-line in the Taxes in Europe Database (TEDB).

As always, this report has benefited from the numerous and extremely valuable contributions received from experts of the national Finance Ministries.

http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/index_en.htmhttp://ec.europa.eu/taxation_customs/taxation/gen_info/info_docs/tax_inventory/index_en.htm

15Taxation trends in the European Union DG Taxation and Customs Union |

1. Part 1: Development of the overall tax revenue in the European Union1

1 Part 1: Development of the overall tax revenue in the European Union

16 Taxation trends in the European Union | DG Taxation and Customs Union

Level and long-term trends

THE EU REMAINS AHIGH TAX AREA

In 2014, the ratio of taxes and compulsory actual social contributions to GDP in the EU-28 was 38.8 % (1). In general, the EU tax level is high compared to other advanced economies: nearly 13 percentage points of GDP above the level for the USA and 8 percentage

points above that recorded by Japan (in 2013). It is also significantly higher than New Zealand (32.4%), Canada (30.8%), Australia (27.5% in 2013) and South Korea (24.6%). Compared to its EFTA neighbours, the EU records an average tax-to-GDP ratio almost identical to that of Iceland and Norway. However, Switzerland has a lower ratio of 27 %.

(1) The figures used in this report for tax to GDP and for total taxation correspond to the Indicator 2 definition (see Part 4 - Annex B, Box A.1).(2) Data on tax revenues collected should be used with some caution in the context of analysing the issue of government centralisation or decentralisation. In particular,

the breakdown by level of government is in general different depending on whether one looks at tax revenue data, total revenue data, or government total expenditure.

THE TAX-TO-GDP RATIO CONTINUED ITS UPWARD GROWTH IN 2014

After dipping in 2008 and 2009, EU-28 tax revenues as a percentage of GDP have risen steadily (Graph 2), and posted another year-on-year increase in 2014. The trend in the euro area has been very similar, albeit with a slightly more pronounced upward growth since 2010.

21 Member States recorded an increase in tax revenue relative to GDP in 2014 compared with 2013. The largest rises were recorded in Denmark (2.8 percentage points of GDP), Cyprus (2.6 p.p.), Malta (1.4 p.p.), Ireland (0.9 p.p.) and Slovakia (0.9 p.p.). Six Member States posted a drop in tax-to-GDP, with the largest decreases in the Czech Republic (- 0.7 p.p.), the United Kingdom (- 0.5 p.p.) and Slovenia (- 0.3 p.p.).

There is considerable diversity within the EU as regards tax levels. As Graph 3 shows, the ratio of 2014 tax revenue to GDP was highest in Denmark, France and Belgium (49.9 %, 45.9 % and 45.3 % respectively); the lowest shares were recorded in Bulgaria (27.8 % of GDP), Lithuania (27.7 %) and Romania (27.7 %).

REVENUE STRUCTURE BY LEVEL OF GOVERNMENT

In 2014, 52.6 % of the aggregate tax revenue in the EU-28 (including social contributions) was claimed by the central or federal government, 31.0 % accrued to the social security funds and 10.4 % to local government (Graph 4) (2). Less than 1 % of the revenue accrued to institutions of the European Union (mainly VAT own resource receipts as well as custom duties and agricultural levies). There are

Graph 1: Tax revenue (including social contributions), EU and selected countries, 2014 (% of GDP)

38.8 40.2

26.0

30.8 30.3 27.5

24.6

32.4

38.9 38.9

27.0

0

5

10

15

20

25

30

35

40

EU-2

8

EA-1

9

US

CA

JP (2

013)

AU

(201

3)

KR

NZ IS

NO

CH

Source: DG Taxation and Customs Union, based on Eurostat and OECD data

1Part 1: Development of the overall tax revenue in the European Union

17DG Taxation and Customs Union | Taxation trends in the European Union

(3) For Belgium, two alternative allocations of tax revenue by sub-sector are shown: ultimately received tax revenues and tax revenues as transmitted under ESA2010 rules to Eurostat. For the purpose of compiling the EU and euro area aggregates, the National Accounts definition is used. Use is made of additional data in order to provide ultimately received taxes by sub-sectors of general government.

Graph 2: Tax revenue (including compulsory actual social contributions), EU-28 and EA-19, 2002-2014 (% of GDP)

EU-28 EA-19

36

37

38

39

40

41

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: DG Taxation and Customs Union, based on Eurostat data

Graph 3: Tax revenue (including compulsory actual social contributions), 2013-2014 (% of GDP)

2013 2014

25

30

35

40

45

50

DK FR

BE

FI

IT

AT SE

HU

LU

DE

NL

HR SI

EL

CY PT

CZ

MT ES

UK EE

PL

SK

IE

LV

BG

LT

RO

IS

NO

EU-2

8

EA-1

9


considerable differences in structure from one Member State to another; for instance some Member states are federal or grant regions a very high degree of fiscal autonomy (Belgium (3), Germany, Austria, Spain). In the United Kingdom and Malta, the social security system is not separate from the central government level from an accounting point of view, whereas in Denmark most social security is financed through general taxation, implying large intra-governmental transfers to the social security funds.

The share of sub-central revenue (defined as municipalities plus the state level where it exists) varies from around 1 % to just under one third of the total. Sweden, Germany, Denmark and Spain in particular show high shares of total taxes received by the non-central authorities. At the other extreme, Estonias share is 1.1 %, while in Malta local government does not levy taxes and is financed by transfers from central government. As for the share of revenue accruing to social security funds, the highest values in the EU are reported by France (53.2 %) and Slovakia (42.5 %). In several countries (Ireland, Malta, UK



and Norway) there is no social security funds sub-sector in the sense of the ESA 2010 national accounts definitions, which has an impact on the tax revenue of the other sub-sectors in these countries.

The amount of the tax revenue recorded in each of the sub-sectors of general government, however, is a very

imperfect indicator of fiscal autonomy, as the sub-sectors of general government may have (legal) rights to receive other current transfers or other revenue from other sub-sectors. In several EU Member States decentralisation has been an important feature for several years already.

Graph 4: Revenue structure by level of government, 2014 (% of total taxes)

99.5 96.8 94.6

81.9

74.7 72.0 68.8 68.7 68.7 68.4 67.8 66.5 64.4 61.8 60.6

57.4 57.3 55.7 55.3 54.6 54.3 51.1 50.2 48.2 47.4

42.2

34.3 30.3 29.4

52.6

43.6

86.2

75.5

0 10 20 30 40 50 60 70 80 90

100

MT IE

U

K EE

DK

CY EL

LU

BG

C

Z PT

AT

RO

SE

HU

LT

BE

(1)

NL

HR SK

IT

LV

SI

PL

FI

ES

FR

D

E BE

EU-2

8 EA

-19

NO

IS

Central government

24.5

13.8

31.3 29.6 28.8

24.9 23.6 23.5

19.4

15.2 14.8 13.4 12.3 12.3

10.6 9.9 7.2

5.7 4.9 4.8 3.7 3.6 3.3 3.1 2.7 2.4 2.3 1.7 1.4 1.1 0.0

15.9 17.3

0 5

10 15 20 25 30 35 40

SE

DE BE

D

K ES

FI

LV

IT

CZ PL

H

R FR

SI

BE (1

) PT

H

U

UK

AT

NL

RO

LU

BG

IE

EL

SK

LT

CY EE

M

T

EU-2

8 EA

-19 IS

N

O

Sub-central level

Local government State government

53.2

42.5 40.5 40.1 39.7 39.6 38.8 38.1

33.7 33.4 32.1 31.8 31.7 30.2 29.0 28.9 28.5 28.5 27.9 27.8 26.2 24.7

16.6 16.3

6.5

0.1 0.0 0.0 0.0

31.0

38.7

0.0 0.0 0

10

20

30

40

50

60

FR

SK

BE

LT

DE

NL SI

PL

ES

H

U

HR

RO

BE (1

) IT

LV

FI

EL

AT

LU

BG

CY PT

EE

C

Z SE

DK IE

M

T U

K

EU-2

8 EA

-19 IS

N

O

Social security funds

(1) As supplied in ESA2010 National Accounts, as opposed to ultimately received revenue. (2) In the ESA2010 national accounts, the social security funds sub-sector is not distinguished for IE, MT, UK and NO.




Graph 5: Structure of tax revenues by major type of taxes, 2014 (1) (% of total taxes)

52.4 51.7 51.3 48.7

46.6 44.0 43.9 43.8 43.2 41.7 41.7 41.2 40.5 40.2 39.3 38.0

35.6 35.6 34.9 34.7 34.5 34.2 33.8 33.3 33.0 31.2 29.2 28.7

35.1 33.0

40.6

29.4

0

10

20

30

40

50

60

BG

SE

HR

HU

RO

CY LV

EL

EE

PT

LT

SI

MT PL

UK IE

IT

CZ SK

FR

ES

LU

AT

DK FI

NL BE

DE

EU-2

8

EA-1

9 IS

NO

Share of indirect taxes

67.4

44.9 42.5 42.3 41.8

39.2 38.1 36.9 34.2 32.0 32.0 31.8 31.6 29.8 29.2 28.7 27.2 27.0

23.0 22.4 21.9 21.7 21.2 19.9 19.6 18.3 17.4 16.7

33.8 31.7

49.9 45.1

0

10

20

30

40

50

60

70

DK IE

MT

UK SE

BE

FI

LU

IT

PT

AT ES

DE

CY

NL FR

EL

LV

EE

RO

SK

PL

CZ

BG

SI

LT

HU

HR

EU-2

8

EA-1

9 IS

NO

Share of direct taxes

43.3 43.2 40.2 39.7 39.6 39.2 38.4 37.4

34.9 34.2 33.9 33.8 32.1 31.6 31.0 30.2 29.1 29.0 28.9 28.8 27.8 26.2 26.2

18.4 17.1 17.0

6.5

0.1

31.4 35.5

25.5

9.5

0

10

20

30

40

50

SK

CZ LT

DE

NL SI

PL

FR

ES

AT

HU

EE

HR BE

RO

IT

LV

EL

FI

LU

BG

PT

CY

UK IE

MT SE

DK

EU-2

8

EA-1

9

NO

IS

Share of social contributions

(1) The shares can exceed 100% due to D.995 capital transfers to the relevant sectors representing amounts assessed but unlikely to be collected.




Revenue structure by type of taxTaxes are traditionally classified as direct or indirect. Direct taxes cover personal income taxes, corporate income taxes and other income and capital taxes Indirect taxes relate to VAT, excise duties and consumption taxes, other taxes on products and production. Actual compulsory social contributions are, as a rule, directly linked to a right to benefits such as old age pensions or unemployment and health insurance.

TAX STRUCTURES DIFFER SUBSTANTIALLY BETWEEN MEMBER STATES

The structure of taxation varies quite significantly across the Member States of the EU. When it comes to the share of direct taxes in total tax revenues, Denmark has the highest share (67.4 %), followed by Ireland, Malta, the United Kingdom and Sweden (as well as Norway and Iceland) with shares lying between 40% and 50 % of revenue (see Graph 5). In general, the shares of social contributions to total tax revenues are correspondingly

low in these countries. In Denmark, there is a special reason for the extremely low share of social contributions: most welfare spending is financed out of general taxation. This requires high direct tax levels and indeed the share of direct taxation to total tax revenues in Denmark is by far the highest in the Union. However, Germany, the Netherlands and France have tax systems that are the mirror image of Denmarks, with high shares of social contributions in the total tax revenues, and relatively low shares of direct tax revenues.

A number of Member States have a much lower share of direct taxes. Many of these countries have adopted flat rate systems, which typically induce a stronger reduction in direct tax rates than indirect tax rates. These lower shares of direct taxes are counterbalanced either by relatively higher proportions of indirect taxes (for example Bulgaria (52.4 %), Croatia (51.3 %) and Hungary (48.7 %)) or by relatively larger shares of social contributions (for example Slovakia (43.3 %), Czech Republic (43.2 %) and Lithuania (40.2 %)).

Distribution of the tax burden by type of tax base

CONSIDERABLE VARIATION BETWEEN MEMBER STATES

Graph 6 shows the distribution of total tax revenue by type of tax base (consumption, labour and capital). Taxes on (employed) labour income are the largest source of revenue, contributing nearly half of all receipts, followed by consumption taxes at roughly one third and then capital taxes at around one fifth.

However, the structure of taxation differs markedly between Member States. Some Member States tend

to have a higher proportion of revenue raised from consumption taxes, and a somewhat lower proportion from taxes on labour. Bulgaria and Croatia stand out with around half of all revenues coming from consumption taxes.

Taxes on capital range from more than a quarter of total revenue (the United Kingdom, Malta, Cyprus and Luxembourg) to less than 10 % (Estonia). Taxes on capital and business income are generally more important than those on the stock of capital, except in the United Kingdom where in 2014 they are fairly evenly matched.



Graph 6: Distribution of the total tax burden according to type of tax base 2014 (% of total tax burden)

0%

10%

20%

30%

40%

50%

60%

BG

HR

RO

HU

EE

LV

SI

LT

MT

CY EL

PL

PT

IE

UK

CZ FI

SK

DK

LU

SE

NL ES

DE

AT IT

FR

BE

EU-2

8

EA-1

9 IS

NO

Share of consumption tax revenue

0%

10%

20%

30%

40%

50%

60%

SE

AT

DE

NL BE

FR

SK

FI

DK

CZ EE

IT

ES

SI

LV

LT

HU

LU

IE

PT

HR EL

PL

RO

UK

BG

CY

MT

EU-2

8

EA-1

9

NO

Share of labour tax revenue

Labour employed Labour non-employed

0%

10%

20%

30%

40%

50%

60%

UK

MT

CY

LU

PL

IT

BE

ES

FR

PT

EL

IE

DK

NL

RO

DE

AT SK

CZ FI

LT

BG

SE

HU

LV

SI

HR EE

EU-2

8 EA

-19 IS

NO

Capital and business income Stocks of capital

Share of capital tax revenue



Taxation on consumption

CONSUMPTION TAXES GREW SLIGHTLY IN 2014

In 2014 the implicit tax rate on consumption (4) for EU-27 was slightly higher than in 2012 and 2013, although in the euro area this growth was slightly more pronounced (see Graph 7), and after falling in 2008 and 2009 has

now climbed above its level in 2007. Although in recent years the euro area showed a lower value of the ITR on consumption than the Union as a whole, in 2014 both groups of Member States seem to be moving closer to a convergence at around 20%.

(4) The ITR on consumption is the ratio of the revenue from all consumption taxes to the final consumption expenditure of households.

Graph 7: Implicit tax rate on consumption, 1995-2014 (%)

18.0

18.5

19.0

19.5

20.0

20.5

21.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EU-27 EA-19


Graph 8: Decomposition of the ITR on consumption 2014 (%)

VAT component Tobacco and alcohol component Energy component Residual

0%

5%

10%

15%

20%

25%

30%

35%

DK

HU

LU

FI

SE

SI

EE

NL IE

CZ AT BE

BG

FR

MT

DE

RO

PL

LV

EL

IT

UK SK

PT

LT

CY ES

EU-2

7

EA-1

9




Graph 9: Development of average standard VAT rate, EU-28, 2000-2016 (%)

19.0%

19.5%

20.0%

20.5%

21.0%

21.5%

22.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: DG Taxation and Customs Union

Seven MS show a rise or more than 1 percentage point in their ITR on consumption in 2014 compared to 2012 (see Table 79 in Annex A). Of particular note were the increases in Hungary (+3.2 percentage points) and Slovenia (+2.3 percentage points). Movements in the other direction can be observed in countries such as Romania and Denmark, with reductions of 0.71 and 0.47 percentage points respectively

SIGNIFICANT DIFFERENCES IN THE COMPONENTS OF TAXATION OF CONSUMPTION

VAT typically accounts for between two-thirds and three quarters of the ITR on consumption (Graph 8). In Sweden, VAT represents 75 % of the ITR (the highest in the EU), compared with 53 % in Italy (the lowest EU value).

However, other non-VAT components are also significant. On average in the EU, energy taxes make up around 17 %

of the ITR on consumption. These are mostly composed of excise duties on mineral oils. The next important category is tobacco and alcohol which account for 8 % of the ITR on average across the EU. These taxes are a relatively significant component of the ITR on consumption for Bulgaria and Estonia, but contribute least to the indicator in Denmark, Sweden, Austria and the Netherlands.

STABILITY IN VAT RATES IN 2016

The rising trend up to 2014 in standard VAT rates has now stopped (Graph 9). Since then, only two MS have adjusted their standard VAT rates. Luxembourg raised its rate by 2 percentage points in 2015 and Romania reduced its standard VAT rate in 2016 by 4 percentage points.

The highest VAT standard rate is found in Hungary (27 %), followed by Croatia, Denmark and Sweden (all 25 %). The lowest rates are in Luxembourg (17 %) and Malta (18 %).



Tabl

e 1:

VA

T ra

tes

in th

e EU

Mem

ber

Sta

tes,

200

1-20

16

(%)

VAT

rate

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Belg

ium

Stan

dard

21

2121

2121

2121

2121

2121

2121

2121

21Re

duce

d 6/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

126/

12

Bulg

aria

Stan

dard

20

2020

2020

2020

2020

2020

2020

2020

20Re

duce

d -

--

--

-7

77

79

99

99

9Cz

ech

Repu

blic

Stan

dard

22

2222

1919

1919

1919

2020

2021

2121

21Re

duce

d 5

55

55

55

99

1010

1415

1510

/15

10/1

5

Den

mar

kSt

anda

rd

2525

2525

2525

2525

2525

2525

2525

2525

Redu

ced

--

--

--

--

--

--

--

--

Ger

man

ySt

anda

rd

1616

1616

1616

1919

1919

1919

1919

1919

Redu

ced

77

77

77

77

77

77

77

77

Esto

nia

Stan

dard

18

1818

1818

1818

1820

2020

2020

2020

20Re

duce

d 5

55

55

55

59

99

99

99

9

Irela

ndSt

anda

rd

2021

2121

2121

2121

21.5

2121

2323

2323

23Re

duce

d 12

.5(4

.3)12

.5(4

.3)13

.5(4

.3)13

.5(4

.4)13

.5(4

.8)13

.5(4

.8)13

.5(4

.8)13

.5(4

.8)13

.5(4

.8)13

.5(4

.8)9/

13.5

(4.8)

9/13

.5(4

.8)9/

13.5

(4.8)

9/13

.5(4

.8)9/

13.5

(4.8)

9/13

.5(4

.8)

Gre

ece

Stan

dard

18

1818

1819

1919

1919

2323

2323

2323

23Re

duce

d 8

(4)

8(4

)8

(4)

8(4

)9

(4.5)

9(4

.5)9

(4.5)

9(4

.5)9

(4.5)

5.5/1

16.5

/13

6.5/1

36.5

/13

6.5/1

36.5

/13

6/13

Spai

nSt

anda

rd

1616

1616

1616

1616

1618

1818

2121

2121

Redu

ced

7(4

)7

(4)

7(4

)7

(4)

7(4

)7

(4)

7(4

)7

(4)

7(4

)8

(4)

8(4

)8

(4)

10 (4

)10

(4)

10(4

)10

(4)

Fran

ceSt

anda

rd

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

19.6

20.0

20.0

20.0

Redu

ced

5.5(2

.1)5.5

(2.1)

5.5(2

.1)5.5

(2.1)

5.5(2

.1)5.5

(2.1)

5.5(2

.1)5.5

(2.1)

5.5(2

.1)5.5

(2.1)

5.5(2

.1)5.5

/7(2

.1)5.5

/7(2

.1)5.5

/10

(2.1)

5.5/1

0(2

.1)5.5

/10

(2.1)

Croa

tiaSt

anda

rd

2222

2222

2222

2222

2223

2325

2525

2525

Redu

ced

(0)

(0)

(0)

(0)

(0)

10(0

)10

(0)

10(0

)10

(0)

10(0

)10

(0)

10(0

)5/

105/

135/

135/

13

Italy

Stan

dard

20

2020

2020

2020

2020

2020

2121

2222

22Re

duce

d 10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)10

(4)

10(4

)

Cypr

usSt

anda

rd

1013

1515

1515

1515

1515

1517

1819

1919

Redu

ced

55

55

55/

85/

85/

85/

85/

85/

85/

85/

85/

95/

95/

9

Latv

iaSt

anda

rd

1818

1818

1818

1818

2121

2222

2121

2121

Redu

ced

--

95

55

55

1010

1212

1212

1212

Lith

uani

aSt

anda

rd

1818

1818

1818

1818

1921

2121

2121

2121

Redu

ced

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

5/9

Luxe

mbo

urg

Stan

dard

15

1515

1515

1515

1515

1515

1515

1517

17Re

duce

d 6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)6/

12(3

)8/

14(3

)8/

14(3

)

Hun

gary

Stan

dard

25

2525

2525

2020

2025

2525

2727

2727

2727

Redu

ced

12(0

)12

(0)

12(0

)5/

155/

155/

155

55/

185/

185/

185/

185/

185/

185/

185/

185/

18

Mal

taSt

anda

rd

1515

1518

1818

1818

1818

1818

1818

1818

Redu

ced

55

55

55

55

55

5/7

5/7

5/7

5/7

5/7

5/7

Net

herla

nds

Stan

dard

19

1919

1919

1919

1919

.019

1919

2121

2121

Redu

ced

66

66

66

66

66

66

66

66

Aust

riaSt

anda

rd

2020

2020

2020

2020

2020

2020

2020

2020

Redu

ced

1010

1010

1010

1010

1010

1010

1010

1010

Pola

ndSt

anda

rd

2222

2222

2222

2222

2222

2323

2323

2323

Redu

ced

7(3

)7

(3)

7(3

)7

(3)

7(3

)7

(3)

7(3

)7

(3)

7(3

)7

(3)

5/8

5/8

5/8

5/8

5/8

5/8



VAT

rate

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Port

ugal

Stan

dard

17

1919

1921

2121

2020

2123

2323

2323

23Re

duce

d 5/

125/

125/

125/

125/

125/

125/

125/

125/

126/

136/

136/

136/

136/

136/

136/

13

Rom

ania

Stan

dard

19

1919

1919

1919

1919

2424

2424

2424

20Re

duce

d -

--

99

99

95/

95/

95/

95/

95/

95/

95/

95/

9

Slov

enia

Stan

dard

19

2020

2020

2020

2020

2020

2022

2222

22Re

duce

d 8

8.58.5

8.58.5

8.58.5

8.58.5

8.58.5

8.59.5

9.59.5

9.5

Slov

akia

Stan

dard

23

2320

1919

1919

1919

.019

2020

2020

2020

Redu

ced

1010

14-

--

1010

106/

1010

1010

1010

10

Finl

and

Stan

dard

22

2222

2222

2222

2222

2323

2324

2424

24Re

duce

d 8/

178/

178/

178/

178/

178/

178/

178/

178/

179/

139/

139/

1310

/14

10/1

410

/14

10/1

4

Swed

enSt

anda

rd

2525

2525

2525

2525

2525

2525

2525

2525

Redu

ced

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

6/12

Uni

ted

King

dom

Stan

dard

17

.517

.517

.517

.517

.517

.517

.517

.515

17.5

20.0

20.0

20.0

20.0

20.0

20.0

Redu

ced

55

55

55

55

55

55

55

55

Sim

ple

aver

ages

EU-2

8St

anda

rd

19.4

19.6

19.6

19.5

19.6

19.5

19.6

19.5

19.9

20.5

20.8

21.1

21.5

21.5

21.6

21.5

EA-1

9St

anda

rd

18.1

18.5

18.5

18.6

18.7

18.7

18.9

18.8

19.2

19.7

19.9

20.1

20.6

20.7

20.8

20.8

Sour

ce: D

G T

axat

ion

and

Cust

oms

Uni

onN

otes

: Ra

tes

give

n in

the

tab

le a

re ra

tes

app

licab

le (f

or m

ore

than

6 m

onth

in th

e ye

ar c

onsi

dere

d, o

r) on

the

1st J

uly

of th

at y

ear.

Whe

n ch

ange

of r

ates

occ

urre

d du

ring

the

year

(not

on

1st J

anua

ry) t

he e

xact

dat

e is

ava

ilab

le in

the

note

s.

Sup

er-r

educ

ed ra

tes

(bel

ow 5

%) a

re s

how

n in

bra

cket

s. N

ote

that

Par

king

rate

s ar

e no

t inc

lude

d in

this

tab

le, a

s th

ey a

re h

isto

ric ra

tes

bel

ow 1

5% n

egot

iate

d by

mem

ber

sta

tes,

and

an e

xcep

tion

to th

e EU

dire

ctiv

e (o

nly

5 m

emb

er s

tate

s re

tain

them

). Fu

ll in

form

atio

n on

VAT

rate

s is

ava

ilab

le a

t VAT

rate

s - E

urop

ean

com

mis

sion

incl

udin

g fu

ll in

form

atio

n on

redu

ced

rate

s an

d pr

oduc

ts to

whi

ch th

ey a

re a

pplic

able

Bu

lgar

ia: R

educ

ed ra

te in

crea

sed

to 9

% o

n 1.

04.2

011

C

zech

Rep

.: St

anda

rd ra

te d

ecre

ased

to 1

9 %

on

1.05

.200

4

Esto

nia:

Sta

ndar

d ra

te in

crea

sed

to 2

0 %

on

1.07

.200

9

Gre

ece:

All

rate

s w

ere

incr

ease

d on

01.

04.2

005.

A fu

rthe

r gen

eral

incr

ease

occ

urre

d on

15/

03/2

010

(to 5

/10

% a

nd 2

1%, f

ollo

wed

the

sam

e ye

ar b

y th

e in

crea

se to

5.5

/11

and

23 %

, whi

ch o

ccur

red

on J

uly

1st.

Redu

ced

rate

incr

ease

d to

13%

and

sup

er re

duce

d ra

te to

6.5

% o

n 1.

1.20

11. S

uper

redu

ced

rate

is lo

wer

ed to

6%

as

of 2

0.07

.201

5.

Spai

n: T

he 2

010

incr

ease

(red

uced

rate

to 8

% a

nd s

tand

ard

rate

to 1

8%) o

ccur

red

on 1

st J

uly.

Bot

h ra

tes

wer

e fu

rthe

r inc

reas

ed o

n 01

.09.

2012

(to

10%

and

21%

).

Fran

ce: B

efor

e 01

.04.

2000

, sta

ndar

d ra

te w

as e

qual

to 2

0.6

%.

C

roat

ia: S

tand

ard

rate

incr

ease

d to

23

% o

n 01

.08.

2009

. A fu

rthe

r inc

reas

e - t

o 25

% -

took

pla

ce o

n 01

.03.

2012

.

Irela

nd: I

rela

nd: T

he (s

uper

-) re

duce

d ra

te w

as 4

% o

n 01

.03.

1999

. It i

ncre

ased

to 4

.2%

on

01.0

3.20

00.T

he ra

te in

crea

sed

to 4

.3%

on

01.0

1.20

01 a

nd it

incr

ease

d to

4.4

% o

n 01

.01.

2004

.The

rate

incr

ease

d to

4.8

% o

n 01

.01.

2005

and

re

mai

ns a

t thi

s ra

te a

t pre

sent

.

Stan

dard

rate

incr

ease

d to

21

% o

n 01

.03.

2002

. Sta

ndar

d ra

te in

crea

sed

furt

her t

o 21

.5 %

on

01.12

.200

8. S

tand

ard

rate

dec

reas

ed to

21%

on

01.0

1.20

10. S

tand

ard

rate

incr

ease

d to

23%

on

01.0

1.20

12 a

nd re

mai

ns a

t thi

s ra

te. A

n ad

ditio

nal r

educ

ed ra

te o

f 9 %

was

intr

oduc

ed o

n 01

.07.

2011

.

Italy

: Sta

ndar

d ra

te in

crea

sed

to 2

1 %

on

17.0

9.20

11. A

furt

her i

ncre

ase

- to

22 %

- to

ok p

lace

on

01.1

0.20

13.

Cy

prus

: The

redu

ced

rate

of 5

% w

as in

trod

uced

on

01.0

7.20

00 to

geth

er w

ith th

e in

crea

se o

f the

sta

ndar

d ra

te fr

om 8

% to

10

%. S

tand

ard

rate

incr

ease

d to

13%

on

01.0

7.20

02. T

he s

econ

d re

duce

d ra

te o

f 8%

was

intr

oduc

ed o

n 01

.08.

2005

.

Stan

dard

rate

incr

ease

d to

17

% o

n 01

.03.

2012

, and

furt

her i

ncre

ased

to 1

8 %

on

14.0

1.20

13. O

n 13

.01.

2014

the

seco

nd re

duce

d ra

te in

crea

sed

to 9

% a

nd th

e st

anda

rd ra

te in

crea

sed

to 1

9 %

.

Latv

ia: R

educ

ed ra

te d

ecre

ased

to 5

% o

n 01

.05.

2004

. Sta

ndar

d ra

te d

ecre

ased

to 2

1 %

on

01.0

7.20

12.

Li

thua

nia:

Red

uced

rate

(5 %

) int

rodu

ced

on 0

1.05

.200

0. S

tand

ard

rate

incr

ease

d to

19

% o

n 01

.01.

2009

and

furt

her i

ncre

ased

to 2

1 %

on

01.0

9.20

09.

Lu

xem

bou

rg: T

he s

econ

d re

duce

d ra

te in

the

tab

le is

act

ually

a p

arki

ng ra

te.

H

unga

ry: T

he s

econ

d re

duce

d ra

te (1

5 %

) was

ab

olis

hed

on 0

1.09

.200

6. R

eint

rodu

ced

on 0

1.07

.200

9 at

18

% to

geth

er w

ith th

e in

crea

sed

of th

e st

anda

rd ra

te to

25

%.

N

ethe

rland

s: St

anda

rd ra

te in

crea

sed

to 2

1 %

on

1.10

.201

2

Pola

nd: T

he (s

uper

-)red

uced

rate

of 3

% w

as in

trod

uced

on

04.0

9.20

00.

Po

rtug

al: S

tand

ard

rate

incr

ease

d to

19

% o

n 05

.06.

2002

. Sta

ndar

d ra

te fu

rthe

r inc

reas

ed to

21

% o

n 01

.07.

2005

. Sta

ndar

d ra

te d

ecre

ased

to 2

0 %

on

01.0

7.20

08. A

ll ra

tes

incr

ease

d by

1 %

on

01/0

7/20

10.

Ro

man

ia: T

he s

econ

d re

duce

d ra

te (5

%) i

ntro

duce

d on

01.

12.2

008.

Sta

ndar

d ra

te in

crea

sed

to 2

4 %

on

01.0

7.20

10. S

tand

ard

rate

dec

reas

ed to

20

% o

n 01

.01.

2016

.

Slov

enia

: Red

uced

rate

incr

ease

d to

9.5

% a

nd s

tand

ard

rate

incr

ease

d to

22

% o

n 1.

07.2

013

Sl

ovak

ia: T

he s

econ

d re

duce

d ra

te (6

%) i

ntro

duce

d on

01.

05.2

010.

Ab

olis

hed

on 0

1.01

.201

1 to

geth

er w

ith th

e st

anda

rd ra

te in

crea

se to

20

%.

Fi

nlan

d: S

econ

d re

duce

d ra

te d

ecre

ased

to 1

2 %

on

1.10.

2009

. Sec

ond

redu

ced

rate

sub

sequ

ently

incr

ease

d to

13

% o

n 01

.07.

2010

toge

ther

with

the

incr

ease

of t

he fi

rst r

educ

ed ra

te to

9 %

and

the

incr

ease

of t

he s

tand

ard

rate

to 2

3 %

.

Uni

ted

King

dom

: Sta

ndar

d ra

te in

crea

sed

to 2

0 %

on

04.0

1.20

11

Tabl

e 1:

VA

T ra

tes

in th

e EU

Mem

ber

Sta

tes,

200

1-20

16 (c

ontin

ued)

(%

)

hhttp://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf



Taxation of labour

SIGNIFICANT INCREASE IN THE TAX BURDEN ON LABOUR SINCE 2009

Since the economic crisis, arguments in favour of lowering the tax burden on labour have gained traction.

However, achieving this aim remains difficult, as can be seen from the continuing upward trend displayed since 2009 of the implicit tax rate on labour (5).

Since falling sharply in 2009 and levelling off in 2010, both the EU-28 and EA-18 averages have climbed back to pre-crisis levels (see Graph 10).

(5) The ITR on labour is calculated as the ratio of taxes and

Documents

Taxation Trends in the European Union · ‘Taxation trends in the European Union’ is available in English ... Stephen Lawson, Federica Liberatore, Juan Lopez Rodriguez, Constantino