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EU Publishes Tax-GDP Ratios For Member States

by Jason Gorringe, Tax-News.com, London

28 November 2016


The tax-to-GDP ratio in the European Union remained stable in 2015, while the ratio in the Eurozone was down slightly on the previous year.

According to Eurostat, the EU's statistics office, tax revenue accounted for 40 percent of EU GDP in 2015. In the euro area, the tax-to-GDP ratio fell from 41.5 percent in 2014 to 21.4 percent in 2015. "This is the first time since its low point 2010 that the tax-to-GDP ratio in both zones did not increase," Eurostat said.

Eurostat said that the tax-to-GDP ratio varies significantly between EU member states. The highest ratios were recorded in France (47.9 percent), Denmark (47.6 percent), and Belgium (47.5 percent).

At 24.4 percent, Ireland had the lowest ratio. However, Eurostat explained that Ireland's GDP for 2015 "was substantially affected by the relocation from outside the EU to Ireland of balance sheets of large multinational enterprises." Beyond that, Romania (28 percent), Bulgaria (29 percent), and Lithuania (29.4 percent) registered the lowest ratios.

The largest increases to ratios were seen in Lithuania, where the ratio rose from 27.9 percent in 2014 to 29.4 percent in 2015, and Estonia (from 32.8 percent to 34.1 percent). In contrast, decreases were recorded in eight member states. Ireland saw the largest drop, from 29.9 percent to 24.4 percent, followed by Denmark (50.3 percent to 47.6 percent).

At 13.6 percent, taxes on production and imports accounted for the greatest share of EU GDP. This was followed by net social contributions (13.2 percent) and taxes on income and wealth (13 percent). In the Eurozone, net social contributions represented the greatest share (15.3 percent), followed by taxes on production and imports (13.3 percent) and taxes on income and wealth (12.6 percent).

Eurostat said that "a clear diversity prevails across the EU member states" when it comes to the revenue generated by the main tax categories. For instance, the share of taxes on production and imports as a percentage of GDP was highest in Sweden, Croatia, and Hungary, and lowest in Ireland, Germany, and Slovakia. The highest ratios for taxes on income and wealth were recorded in Denmark, Sweden, and Belgium.

TAGS: tax | Belgium | Denmark | Hungary | Ireland | gross domestic product (GDP) | corporation tax | Bulgaria | Estonia | Romania | Slovakia | France | Germany | Sweden | revenue statistics | individual income tax | European Union (EU) | Croatia | Lithuania | Europe

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