In comparison with the rest of the world, the EU27 tax ratio remains generally high, exceeding those of the USA and Japan by some 12 percentage points. However, the tax burden varies significantly between Member States, ranging in 2007 from less than 30% in Romania and Slovakia (both 29.4%) and Lithuania (29.9%), to a little less than 50% in Denmark (48.7%) and Sweden (48.3%).
Since 2000, significant changes in tax-to-GDP ratios have taken place in several Member States. The largest falls were recorded in Slovakia, where the overall tax burden dropped from 34.1% in 2000 to 29.4% in 2007, and Finland (from 47.2% to 43.0%). The highest increases were observed in Cyprus (from 30.0% to 41.6%) and Malta (from 28.2% to 34.7%).
This information comes from the 2009 edition of the publication Taxation trends in the European Union issued by Eurostat, the Statistical Office of the European Communities 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 includes an overview of the tax measures adopted in the Member States to respond to the global economic and financial crisis.
Highest implicit tax rates on labour in Italy, on consumption in Denmark and on capital in Cyprus
Labour taxes remain the largest source of tax revenue, representing close to half of total tax receipts in the EU27. Taxes on capital accounted for approximately 23% of total tax receipts, and consumption taxes for 28%.
The average implicit tax rate on labour, a broad measure of the tax burden falling on work income, was unchanged in the EU27 at 34.4% in 2007 compared with 2006, after having declined steadily from 35.9% in 2000. Among the Member States, the implicit tax rate on labour ranged in 2007 from 20.1% in Malta, 24.0% in Cyprus and 25.7% in Ireland to 44.0% in Italy, 43.1% in Sweden and 42.3% in Belgium.
Continuing an upward trend that started in 2002, the average implicit tax rate on consumption in the EU27 increased marginally, from 22.0% in 2006 to 22.2% in 2007. Implicit tax rates on consumption were highest in 2007 in Denmark (33.7%), Sweden (27.8%) and Hungary (27.1%), and lowest in Greece (15.4%), Spain (15.9%) and Italy (17.1%).
In the EU27, the average implicit tax rate on capital for the Member States for which data are available was 28.7% in 2007. The highest implicit tax rates on capital were recorded in Cyprus (50.5%), Denmark (44.9%) and the United Kingdom (42.7%), and the lowest in Estonia (10.3%), Lithuania (12.1%) and Latvia (14.6%).
Highest top tax rate on personal income in Denmark, on corporate income in Malta
The top personal income tax rate differs substantially within the EU. The highest top rates on 2008 personal income are found in Denmark (59.0%), Sweden (56.4%) and Belgium (53.7%), and the lowest in Bulgaria (10.0%), the Czech Republic (15.0%) and Romania (16.0%). Since 2000, top personal income tax rates have fallen or remained unchanged in all Member States, except Sweden (from 51.5% in 2000 to 56.4% in 2008) and Portugal (from 40.0% to 42.0%). The largest decreases were registered in Bulgaria (from 40.0% to 10.0%), Romania (from 40.0% to 16.0%) and Slovakia (from 42.0% to 19.0%), all of which moved to flat rate systems.
The highest statutory tax rates on 2009 corporate income are recorded in Malta (35.0%), France (34.4%) and Belgium (34.0%), and the lowest in Bulgaria and Cyprus (both 10.0%) and Ireland (12.5%). Since 2000, top corporate income tax rates have fallen or remained unchanged in all Member States, except Hungary (from 19.6% in 2000 to 21.3% in 2009). The largest decreases were registered in Bulgaria (from 32.5% to 10.0%), Germany (from 51.6% to 29.8%) and Cyprus (from 29.0% to 10.0%).
Energy taxes represented 1.8% of GDP in the EU27 in 2007
Energy taxes include taxes on energy products such as mineral oils, gas and electricity for both transport and stationary purposes. They are by far the most important environmental taxes, representing around three quarters of environmental tax receipts in the EU. In the EU27, energy taxes amounted to 1.8% of GDP in 2007, and ranged from 1.2% of GDP in Greece and Ireland to 3.0% in Bulgaria.
From this year onwards, the publication will include data on transport fuel taxes separately from other energy taxes. Taxes on transport fuels are the most important part of energy taxes, and represented more than 80% of energy taxes in the EU27 in 2007. The highest transport fuel taxes as a percentage of total energy taxation were found in Latvia (100%), Lithuania and Luxembourg (both 98%), and the lowest in Denmark (52%), Sweden (56%) and the Netherlands (68%).
