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Taxation trends in the European Union

Zone(s): Europe ¦ Sector(s): Taxation

[16 June 2014, Europa website] The overall tax-to-GDP ratio in the EU28 rises to 39.4% of GDP in 2012. Labour taxes remain major source of tax revenue.

The overall tax-to-GDP ratio = meaning the sum of taxes and compulsory social contributions in % of GDP – in the EU28 stood at 39.4% in 2012, up from 38.8% in 2011. The overall tax ratio in the euro area (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”, 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.

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