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Increase In 2011 EU Tax-To-GDP Ratio

by Ulrika Lomas, Tax-News.com, Brussels

01 May 2013


The overall tax-to-GDP ratio among all 27 nation in the EU stood at 38.8 percent in 2011, increasing from 38.3 percent in 2010, according to the 2013 edition of the publication Taxation Trends in the European Union.

The publication, which is issued by Eurostat and the European Commission's Directorate-General for taxation and Customs Union, revealed significant variations in the tax burden between Member States in 2011, ranging from 26 percent in Lithuania to 47.7 percent in Denmark.

Portugal recorded the largest increase in tax-to-GDP ratio in 2011 standing at 33.2 percent from 31.5 percent in 2010, closely followed by Romania and France. The largest decrease was recorded by Estonia, reporting a ratio of 32.8 percent in 2011 falling from 34.1 percent in 2010, followed by Sweden and Lithuania.

Labor taxes are shown to be the largest source of tax revenue in the EU representing almost half of total tax receipts, followed by consumption taxes at roughly one third and taxes on capital at around one fifth.

The GDP-weighted average implicit tax rate on labor in the EU was up from 35.4 percent in 2010 to 35.8 percent in 2011 while the average implicit tax rate on consumption increased from 19.7 percent in 2010 to 20.1 percent in 2011.

The publication also revealed that the average top personal income tax rate in the EU, up to March 11, 2013, stood at 38.3 percent, increasing from 38.1 percent in 2012. However, this still falls below the rate of 44.8 percent reported in 2000.

The average top corporate tax rate was 23.5 percent in 2013 compared to 23.4 percent in 2012, while the average standard VAT rate stood at 21.3 percent in 2013, up from 21 percent in 2012.

TAGS: tax | value added tax (VAT) | Denmark | Portugal | gross domestic product (GDP) | corporation tax | Estonia | Romania | France | Sweden | individual income tax | European Union (EU) | Lithuania | Europe

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