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 2009 from less than 30% in Latvia (26.6%), Romania (27.0%), Ireland (28.2%), Slovakia (28.8%), Bulgaria (28.9%) and Lithuania (29.3%) to more than 45% in Denmark (48.1%) and Sweden (46.9%).
Between 2000 and 2009, the largest falls in tax-to-GDP ratios were recorded in Slovakia (from 34.1% in 2000 to 28.8% in 2009), Sweden (from 51.5% to 46.9%), Greece (from 34.6% to 30.3%) and Finland (from 47.2% to 43.1%), and the highest increases in Malta (from 28.2% to 34.2%), Cyprus (from 30.0% to 35.1%) and Estonia (from 31.0% to 35.9%).
This information comes from the 2011 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 for the first time includes data on average effective tax ratios for non-financial corporations. In addition, the report also contains a detailed analysis of the impact of the economic and financial crisis on the tax systems of all EU Member States.
Standard VAT rate hiked by 1.3 points since the beginning of the economic crisis
One area where the onset of the economic and financial crisis has clearly had an impact was consumption taxation. Rising only slightly from 2000 to 2008, the average standard VAT rate in the EU27 has risen strongly from 19.4% in 2008, to reach 20.7% in 2011. The standard VAT rate in 2011 varied from 15.0% in Cyprus and Luxembourg to 25.0% in Denmark, Hungary and Sweden.
About half of the Member States have increased VAT rates between 2008 and 2011. The highest increases were registered in Hungary (from 20.0% to 25.0%), Romania (from 19.0% to 24.0%), Greece (from 19.0% to 23.0%) and Latvia (from 18.0% to 22.0%).
Highest top tax rate on personal income in Sweden, Belgium and the Netherlands
The average top personal income tax rate in the EU27 fell in 2011, largely due to a 20 percentage point drop in Hungary. The highest top rates on 2011 personal income are found in Sweden (56.4%), Belgium (53.7%), the Netherlands (52.0%), Denmark (51.5%), Austria and the United Kingdom (both 50.0%), and the lowest in Bulgaria (10.0%), the Czech Republic and Lithuania (both 15.0%), Romania (16.0%) and Slovakia (19.0%).
Corporate tax rates in the EU27 continued their declining trend in 2011. The highest statutory tax rates6 on 2011 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%).
Highest implicit tax rates on labour in Italy, on consumption and capital in Denmark
The largest source of tax revenue in the EU27 is labour taxes, representing nearly half of total tax receipts, followed by consumption taxes at roughly one third and taxes on capital at just under one fifth.
The average implicit tax rate on labour, a broad measure of the average tax burden falling on work income, was down in the EU27 at 32.9% of the potential tax base in 2009 compared with 33.8% in 2008, continuing the decline from 35.7% in 2000. Among the Member States, the implicit tax rate on labour ranged in 2009 from 20.2% in Malta, 23.1% in Portugal, 24.3% in Romania and 25.1% in the United Kingdom, to 42.6% in Italy, 41.5% in Belgium, 41.1% in France and 41.0% in Hungary.
The average implicit tax rate on consumption in the EU27, which had risen between 2001 and 2007, dropped to 20.9% in 2009 from 21.4% in 2008. In 2009, implicit tax rates on consumption were lowest in Spain (12.3%), Greece (14.0%), Portugal (16.2%) and Italy (16.3%), and highest in Denmark (31.5%), Hungary (28.2%), Estonia and Sweden (both 27.6%).
In the EU27, the average implicit tax rate on capital for the Member States for which data are available was 24.7% in 2009 compared with 25.2% in 2008. The lowest implicit tax rates on capital were recorded in Latvia (10.3%), Lithuania (10.9%) and Estonia (14.0%), and the highest in Denmark (43.8%), Italy (39.1%) and the United Kingdom (38.9%).
