Labour taxes remain major source of tax revenue
The overall tax-to-GDP ratio1, meaning the sum of taxes and compulsory social contributions in % of GDP, in the EU282 stood at 39.4% in 2012, up from 38.8% in 2011. The overall tax ratio in the euro area2 (EA18) increased to 40.4% in 2012 from 39.5% in 2011. In 2013, Eurostat estimates show that tax revenues as a percentage of GDP are set to continue rising in both zones.
The tax burden varies significantly between Member States, ranging in 2012 from less than 30% of GDP in Lithuania (27.2%), Bulgaria and Latvia (both 27.9%), Romania and Slovakia (both 28.3%) and Ireland (28.7%), to more than 40% of GDP in Denmark (48.1%), Belgium (45.4%), France (45.0%), Sweden (44.2%), Finland (44.1%), Italy (44.0%) and Austria (43.1%).
Between 2011 and 2012, increases in tax-to-GDP ratios of more than 1 percentage point were recorded in Hungary (from 37.3% to 39.2%), Italy (from 42.4% to 44.0%), Greece (from 32.4% to 33.7%), France (from 43.7% to 45.0%), Belgium (from 44.2% to 45.4%) and Luxembourg (from 38.2% to 39.3%), while the largest falls in the ratio were registered in Portugal (from 33.2% to 32.4%), the United Kingdom (from 35.8% to 35.4%) and Slovakia (from 28.6% to 28.3%).
This information comes from the 2014 edition of the publication “Taxation trends in the European Union”3, issued by Eurostat, the statistical office of the European Union and the European 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 for an accurate comparison of the tax systems and tax policies between EU Member States.
2013: Eurostat estimate
Labour taxes the largest source of tax revenue in nearly all Member States
The largest source of tax revenue in the EU28 is labour taxes, representing more than half of total tax receipts in 2012 (51.0%), followed by consumption taxes (28.5%) and taxes on capital (20.8%).
Labour taxes were the largest source of tax revenue in 2012 in twenty four Member States, and in thirteen Member States they accounted for more than half of total tax revenue. The highest shares of taxation from labour were observed in Sweden (58.6%), the Netherlands (57.5%), Austria (57.4%) and Germany (56.6%). Only in Bulgaria (32.9%), Malta (34.6%), Cyprus (37.1%) and the United Kingdom (38.9%) was the share below 40%.
Consumption taxes were the largest source of tax revenue in 2012 in four Member States: Bulgaria, Croatia, Malta and Romania. The highest shares of taxation from consumption were recorded in Bulgaria (53.3%), Croatia (49.1%) and Romania (45.1%), and the lowest in Belgium (23.7%), France and Italy (both 24.7%).
Taxes on capital accounted for the smallest share of tax revenue in all Member States in 2012. Shares of more than 25% were registered in Luxembourg (27.5%), the United Kingdom (27.4%), Malta (26.6%) and Cyprus (26.1%), and of less than 10% in Estonia (7.1%) and Slovenia (9.8%).
Tax revenue
|
Tax revenue, % of GDP |
Tax revenue by type of tax base as a % of total tax revenue*: |
||||||||||
Labour |
Consumption |
Capital |
||||||||||
2002 |
2011 |
2012 |
2002 |
2011 |
2012 |
2002 |
2011 |
2012 |
2002 |
2011 |
2012 |
|
EU28** |
38.8 |
38.8 |
39.4 |
50.8 |
50.9 |
51.0 |
28.8 |
28.9 |
28.5 |
20.7 |
20.4 |
20.8 |
EA18** |
39.5 |
39.5 |
40.4 |
53.0 |
53.3 |
53.3 |
27.4 |
27.3 |
26.8 |
19.8 |
19.8 |
20.2 |
Belgium |
45.2 |
44.2 |
45.4 |
54.9 |
54.6 |
53.9 |
24.2 |
24.1 |
23.7 |
20.6 |
20.8 |
22.0 |
Bulgaria |
28.5 |
27.3 |
27.9 |
41.8 |
33.8 |
32.9 |
41.6 |
51.9 |
53.3 |
16.6 |
14.3 |
13.8 |
Czech Republic |
34.6 |
34.6 |
35.0 |
52.9 |
51.9 |
51.7 |
27.9 |
32.9 |
33.4 |
19.3 |
15.2 |
14.9 |
Denmark |
47.9 |
47.7 |
48.1 |
54.5 |
51.3 |
51.0 |
33.0 |
31.5 |
31.0 |
12.8 |
17.6 |
18.4 |
Germany |
38.9 |
38.5 |
39.1 |
60.7 |
56.0 |
56.6 |
26.8 |
28.2 |
27.6 |
12.5 |
15.8 |
15.9 |
Estonia |
31.0 |
32.3 |
32.5 |
54.5 |
52.1 |
51.0 |
38.4 |
41.3 |
41.9 |
7.1 |
6.6 |
7.1 |
Ireland |
28.3 |
28.2 |
28.7 |
35.3 |
43.0 |
42.7 |
38.8 |
34.8 |
34.8 |
26.0 |
22.2 |
22.5 |
Greece |
33.7 |
32.4 |
33.7 |
38.3 |
36.5 |
41.9 |
36.7 |
38.6 |
36.3 |
25.0 |
25.0 |
21.8 |
Spain |
34.1 |
31.8 |
32.5 |
48.1 |
55.0 |
53.0 |
27.7 |
26.8 |
26.5 |
25.7 |
20.9 |
22.9 |
France |
43.3 |
43.7 |
45.0 |
51.5 |
52.3 |
52.3 |
26.2 |
25.2 |
24.7 |
22.9 |
23.2 |
23.6 |
Croatia |
37.9 |
35.3 |
35.7 |
38.9 |
41.4 |
40.7 |
50.5 |
47.3 |
49.1 |
10.7 |
11.3 |
10.3 |
Italy |
40.5 |
42.4 |
44.0 |
49.9 |
52.0 |
51.1 |
26.1 |
25.3 |
24.7 |
23.9 |
22.7 |
24.2 |
Cyprus |
30.9 |
35.3 |
35.3 |
32.5 |
35.7 |
37.1 |
38.5 |
36.2 |
36.8 |
29.0 |
28.1 |
26.1 |
Latvia |
28.6 |
27.6 |
27.9 |
51.7 |
50.0 |
49.0 |
36.7 |
38.3 |
38.4 |
11.6 |
11.7 |
12.6 |
Lithuania |
29.1 |
27.4 |
27.2 |
50.8 |
46.4 |
46.5 |
40.1 |
41.1 |
39.8 |
9.7 |
12.7 |
13.9 |
Luxembourg |
39.3 |
38.2 |
39.3 |
38.5 |
44.2 |
44.3 |
27.3 |
27.8 |
28.1 |
34.2 |
28.0 |
27.5 |
Hungary |
38.0 |
37.3 |
39.2 |
50.3 |
47.3 |
46.4 |
37.0 |
39.1 |
40.0 |
12.6 |
13.6 |
13.5 |
Malta |
30.0 |
33.0 |
33.6 |
36.9 |
33.5 |
34.6 |
39.3 |
40.2 |
38.8 |
23.8 |
26.3 |
26.6 |
Netherlands |
37.7 |
38.6 |
39.0 |
49.7 |
56.3 |
57.5 |
30.2 |
28.8 |
28.3 |
20.1 |
14.9 |
14.2 |
Austria |
43.6 |
42.2 |
43.1 |
55.2 |
56.7 |
57.4 |
28.5 |
27.9 |
27.6 |
16.5 |
15.6 |
15.2 |
Poland |
32.7 |
32.3 |
32.5 |
41.1 |
38.4 |
40.4 |
36.3 |
39.1 |
36.3 |
23.7 |
22.9 |
23.7 |
Portugal |
31.4 |
33.2 |
32.4 |
37.7 |
41.7 |
41.4 |
38.1 |
36.6 |
37.4 |
24.2 |
21.6 |
21.1 |
Romania |
28.1 |
28.4 |
28.3 |
43.9 |
39.3 |
40.0 |
38.9 |
44.2 |
45.1 |
17.2 |
16.4 |
15.0 |
Slovenia |
37.8 |
37.2 |
37.6 |
54.3 |
52.2 |
52.5 |
36.1 |
37.3 |
37.9 |
9.7 |
10.6 |
9.8 |
Slovakia |
33.0 |
28.6 |
28.3 |
45.8 |
44.1 |
45.4 |
32.7 |
36.2 |
33.4 |
21.4 |
19.7 |
21.2 |
Finland |
44.7 |
43.7 |
44.1 |
52.2 |
52.3 |
53.2 |
29.9 |
32.3 |
32.4 |
17.9 |
15.4 |
14.3 |
Sweden |
47.5 |
44.4 |
44.2 |
62.5 |
57.5 |
58.6 |
26.7 |
28.9 |
28.4 |
10.8 |
13.7 |
13.0 |
United Kingdom |
34.8 |
35.8 |
35.4 |
38.6 |
39.1 |
38.9 |
33.0 |
33.2 |
33.8 |
28.4 |
27.7 |
27.4 |
Iceland |
35.2 |
35.9 |
36.8 |
: |
: |
: |
37.6 |
34.6 |
35.0 |
: |
: |
: |
Norway |
43.1 |
42.7 |
42.2 |
43.2 |
40.7 |
41.5 |
29.7 |
25.8 |
25.7 |
27.1 |
33.5 |
32.8 |
* Shares may be more than 100% for Member States, where a recording of amounts assessed but not collected is chosen to approximate accrual. Please refer additionally to methodological notes in Annex B of the Taxation trends publication.
** EU28 and EA18 aggregates are calculated as GDP-weighted averages of the Member States.
: Data not available
Lowest implicit tax rates on labour in Malta and on consumption in Spain
The average implicit tax rate4 on labour in the EU28 rose from 35.8% in 2011 to 36.1% in 2012. Among the Member States, the implicit tax rate on labour in 2012 ranged from 23.3% in Malta, 24.5% in Bulgaria, 25.2% in the United Kingdom and 25.4% in Portugal, to 40.1% in Finland, 41.5% in Austria and 42.8% in Belgium and Italy.
The average implicit tax rate on consumption in the EU28 was stable at 19.9% in both 2011 and 2012. Implicit tax rates on consumption were lowest in 2012 in Spain (14.0%), Greece (16.2%) and Slovakia (16.7%), and highest in Denmark (30.9%), Croatia (29.1%) and Luxembourg (28.9%).
Implicit tax rates*
|
Labour |
Consumption |
||||
2002 |
2011 |
2012 |
2002 |
2011 |
2012 |
|
EU28** |
35.5 |
35.8 |
36.1 |
19.7 |
19.9 |
19.9 |
EA18** |
37.8 |
37.7 |
38.5 |
19.4 |
19.3 |
19.3 |
Belgium |
43.3 |
42.9 |
42.8 |
21.4 |
21.0 |
21.1 |
Bulgaria |
33.4 |
24.2 |
24.5 |
16.6 |
21.1 |
21.5 |
Czech Republic |
41.3 |
39.0 |
38.8 |
18.4 |
21.8 |
22.5 |
Denmark |
38.8 |
34.3 |
34.4 |
33.7 |
31.4 |
30.9 |
Germany |
38.7 |
37.3 |
37.8 |
18.9 |
20.0 |
19.8 |
Estonia |
37.8 |
35.7 |
35.0 |
19.9 |
25.8 |
26.0 |
Ireland |
26.0 |
28.2 |
28.7 |
24.4 |
21.4 |
21.9 |
Greece |
34.0 |
30.9 |
38.0 |
16.1 |
16.3 |
16.2 |
Spain |
32.1 |
32.9 |
33.5 |
15.5 |
14.1 |
14.0 |
France |
38.7 |
38.8 |
39.5 |
20.5 |
19.7 |
19.8 |
Croatia |
29.5 |
29.7 |
29.2 |
30.1 |
27.9 |
29.1 |
Italy |
41.9 |
42.3 |
42.8 |
17.8 |
17.4 |
17.7 |
Cyprus |
22.3 |
26.8 |
28.8 |
15.0 |
17.6 |
17.6 |
Latvia |
37.8 |
33.3 |
33.0 |
17.0 |
17.2 |
17.4 |
Lithuania |
38.1 |
31.5 |
31.9 |
17.9 |
18.2 |
17.4 |
Luxembourg |
28.4 |
32.5 |
32.9 |
22.6 |
28.0 |
28.9 |
Hungary |
41.2 |
38.2 |
39.8 |
25.0 |
26.8 |
28.1 |
Malta |
22.4 |
22.5 |
23.3 |
16.3 |
18.9 |
18.7 |
Netherlands |
31.5 |
37.5 |
38.5 |
23.3 |
24.8 |
24.5 |
Austria |
40.8 |
40.8 |
41.5 |
22.5 |
21.2 |
21.3 |
Poland |
32.4 |
32.0 |
33.9 |
17.9 |
20.8 |
19.3 |
Portugal |
22.8 |
25.4 |
25.4 |
18.8 |
18.2 |
18.1 |
Romania |
31.2 |
33.0 |
30.4 |
16.2 |
20.3 |
20.9 |
Slovenia |
37.7 |
35.3 |
35.6 |
23.7 |
22.9 |
23.4 |
Slovakia |
36.7 |
31.6 |
32.3 |
18.7 |
18.3 |
16.7 |
Finland |
43.8 |
39.5 |
40.1 |
27.7 |
26.4 |
26.4 |
Sweden |
43.8 |
38.9 |
38.6 |
27.0 |
27.3 |
26.5 |
United Kingdom |
24.4 |
25.8 |
25.2 |
18.4 |
19.3 |
19.0 |
Iceland |
: |
: |
: |
25.8 |
24.8 |
24.5 |
Norway |
37.5 |
36.4 |
36.4 |
29.7 |
29.2 |
29.4 |
* Implicit tax rates (ITR) express aggregate tax revenues as a percentage of the potential tax base for each field (see footnote 4).
** EU28 and EA18 aggregates are calculated as GDP-weighted averages of the Member States.
: Data not available
- The overall tax-to-GDP ratio measures the tax burden as the total amount of taxes and compulsory actual social contributions as a percentage of GDP. This definition differs slightly from the one used in Statistics in Focus 4/2014, which includes voluntary and imputed social contributions.
- EU28: Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.
Euro area (EA18): Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. - “Taxation trends in the European Union“, only available in English. This publication and News Release are mostly based on data available on 11 March 2014. The publication can be purchased from authorised sales agents or downloaded free of charge in PDF format from the Eurostat and Directorate-General for Taxation and Customs Union websites:http://epp.eurostat.ec.europa.eu/portal/page/portal/government_finance_statistics/publications/other_publications
http://ec.europa.eu/taxtrends - Implicit tax rates (ITR) measure the average tax burden on different types of economic income or activities, i.e. on labour, consumption and capital. ITR express aggregate tax revenues as a percentage of the potential tax base for each field. The ITR on labour is the ratio between taxes and social contributions paid on earned income and the cost of labour. The numerator includes all direct and indirect taxes and social contributions levied on employed labour income, while the denominator amounts to the total compensation of employees working in the economic territory increased by taxes on the total wage bill and payroll taxes. It is calculated for employed labour only. The ITR on consumption is the ratio between the revenue from consumption taxes and the final consumption expenditure of households on the economic territory.