In comparison with the rest of the world, the EU27 tax ratio remains generally high and more than one third above the levels recorded in the USA and Japan. However, the tax burden varies significantly between Member States, ranging in 2008 from less than 30% in Romania (28.0%), Latvia (28.9%), Slovakia (29.1%) and Ireland (29.3%), to almost 50% in Denmark (48.2%) and Sweden (47.1%).
Between 2000 and 2008, the largest falls in tax-to-GDP ratios were recorded in Slovakia (from 34.1% in 2000 to 29.1% in 2008), Sweden (from 51.8% to 47.1%) and Finland (from 47.2% to 43.1%), and the highest increases in Cyprus (from 30.0% to 39.2%) and Malta (from 28.2% to 34.5%).
This information comes from the 2010 edition of the publication Taxation trends in the European Union issued by Eurostat, the statistical office of the European Union and the Commission’s Directorate-General for Taxation and Customs Union. This publication compiles tax indicators in a harmonised framework based on the European System of Accounts (ESA 95), allowing accurate comparison of the tax systems and tax policies between EU Member States.
This year's edition of the report introduces data on cyclically-adjusted total tax revenues. Cyclical adjustment is a statistical technique that allows an assessment of to what extent the changes in the tax ratios are due to cyclical factors and to what extent they reflect permanent developments such as tax hikes or cuts. The cyclically-adjusted data indicate that the marked pickup in the tax ratio recorded in 2004-2007 was essentially due to the economic upswing in that period. The report also includes a full overview of the tax measures taken by Member States to counteract the effects of the crisis, with a quantification of their budgetary impact.
Highest implicit tax rates on labour in Italy, on consumption in Denmark and on capital in the United Kingdom
The largest source of tax revenue in the EU27 is labour taxes, representing over 40% of total tax receipts, followed by consumption taxes at roughly one quarter and taxes on capital at just over one fifth.
The average implicit tax rate on labour, a broad measure of the tax burden falling on work income, was almost unchanged in the EU27 at 34.2% in 2008 compared with 34.3% in 2007, after having declined from 35.8% in 2000. Among the Member States, the implicit tax rate on labour ranged in 2008 from 20.2% in Malta, 24.5% in Cyprus and 24.6% in Ireland to 42.8% in Italy, 42.6% in Belgium and 42.4% in Hungary.
The average implicit tax rate on consumption in the EU27, which had risen between 2001 and 2007, dropped to 21.5% in 2008 from 22.2% in 2007. In 2008, implicit tax rates on consumption were lowest in Spain (14.1%), Greece (15.1%) and Italy (16.4%), and highest in Denmark (32.4%), Sweden (28.4%) and Luxembourg (27.1%).
In the EU27, the average implicit tax rate on capital for the Member States for which data are available was 26.1% in 2008 compared with 26.8% in 2007. The lowest implicit tax rates on capital were recorded in Estonia (10.7%), Lithuania (12.4%) and Ireland (15.7%), and the highest in the United Kingdom (45.9%), Denmark (43.1%) and France (38.8%).
