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European Union Tax Burden Rose In 2014

by Ulrika Lomas, Tax-News.com, Brussels

19 January 2016


The tax-to-gross domestic product (GDP) ratio in the European Union crept higher in 2014, to 40 percent, according to a new report from Eurostat.

Denmark continued to have the most burdensome tax regime, with a tax-to-GDP ratio of 50.8 percent, followed by France and Belgium (both 47.9 percent), Finland (44 percent), Austria (43.8 percent), and Italy and Sweden (both 43.7 percent).

At the opposite end of the scale, Romania had the lowest tax burden relative to the size of its GDP (27.7 percent), followed by Bulgaria (27.8 percent), Lithuania (28 percent), and Latvia (29.2 percent).

Across the whole EU, taxes on production and imports accounted for 13.6 percent of GDP and current taxes on income, wealth, etc. stood at 12.8 percent of GDP. Current taxes on income, wealth, etc. as a percentage of GDP decreased from 2007 to 2010, but there was a slight increase in 2011 followed by stronger increases in 2012 and 2013. From 2013 to 2014, the burden of social contributions decreased by 0.1 percentage point to 13.4 percent of GDP.

Between 2013 and 2014 decreases in the tax-to-GDP ratio were observed in eight EU member states (Belgium, Bulgaria, the Czech Republic, Luxembourg, Portugal, Slovenia, Sweden, and the United Kingdom) as well as Norway and Switzerland. The largest decreases in the tax-to-GDP ratio were observed in Norway (one percentage point).

Increases in the tax-to-GDP ratios were observed in twenty member states as well as Iceland and Serbia. In percentage points, the highest increases the tax burden from 2013 to 2014 were recorded by Iceland (2.9 percentage points), Denmark (about 2.75 percentage points), Cyprus (2.6 percentage points), Malta (1.4 percentage points), and Serbia (one percentage point).

TAGS: tax | value added tax (VAT) | Belgium | Denmark | Iceland | Malta | Portugal | Slovenia | export duty | gross domestic product (GDP) | corporation tax | Bulgaria | Latvia | Luxembourg | Norway | Romania | Serbia | United Kingdom | Austria | Cyprus | Czech Republic | Finland | France | Italy | Sweden | Switzerland | import duty | Lithuania | Europe

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