Taxation trends in the European Union

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3 St t i s t i c l b o o k s Txtion trnds in th Europn Union Dt for th EU Mmbr Stts, Iclnd nd Norwy 2012 dition o Txtion nd Customs Union

4 Europ Dirct is srvic to hlp you find nswrs to your qustions bout th Europn Union. Frphon numbr (*): (*) Crtin mobil tlphon oprtors do not llow ccss to numbrs or ths clls my b billd. Mor informtion on th Europn Union is vilbl on th Intrnt ( Ctloguing dt cn b found t th nd of this publiction. Luxmbourg: Publictions Offic of th Europn Union, 2012 ISBN ISSN doi: /23293 Ct. No KS-DU EN-C Thm: Economy nd finnc Collction: Sttisticl books Europn Union, 2012 Rproduction is uthorisd providd th sourc is cknowldgd. Covr photo: Miln Pin Printd in Blgium PRINTED ON ELEMENTAL CHLORINE-FREE BLEACHED PAPER (ECF) PRINTED ON TOTALLY CHLORINE-FREE BLEACHED PAPER (TCF ) PRINTED ON RECYCLED PAPER PRINTED ON PROCESS CHLORINE-FREE RECYCLED PAPER (PCF)

5 Prfc Prfc This is th sixth issu of 'Txtion Trnds in th Europn Union', n xpndd nd improvd vrsion of prvious publiction, 'Structurs of th txtion systms in th Europn Union'. Th objctiv of th rport rmins unchngd: to prsnt complt viw of th structur, lvl nd trnds of txtion in th Union ovr mdium- to long-trm priod. Txtion is t th hrt of citizns' rltionship with th Stt. It is not only govrnmnt xprts nd cdmics, but lso mny citizns tht sk th Europn Commission qustions bout tx lvls in th EU nd on how Mmbr Stts compr with ch othr; this rport, publishd nnully, is on wy of nswring thm. Much work hs gon into mking sur tht th dt it contins r fully comprbl cross countris. Th mthodology to nsur this ws dvlopd jointly by sttisticins from Eurostt nd conomists from th Dirctort-Gnrl for Txtion nd th Customs Union, who hv drftd th rport. In ddition, xprts from ntionl Sttisticl Offics nd from th Ministris of Finnc of ll countris covrd hv ctivly contributd by supplying dt nd commnts; w would lik to xprss our thnks for thir vlubl suggstions nd hlp. This yr, mjor ffort ws md to bring forwrd th publiction dt of th rport. This objctiv ws st in ordr to mk vilbl th dt nd nlysis contind in it during th Europn Smstr, s th propr functioning of tx systms is ky prrquisit for conomic growth. Th dt on th tx burdn in th vrious Mmbr Stts cn thus b usd s n input for th formultion of th Country-Spcific Rcommndtions on tx rform tht will b nnouncd t th nd of th Europn Smstr. Bsids th rlir publiction dt, th 2012 dition of th rport prsnts for th first tim dt on proprty txtion, n r of txtion with high policy rlvnc, for which until now no hrmonisd dt wr publishd for ll EU Mmbr Stts. This yr's rport fills tht gp. Th 2012 dition lso fturs mor strmlind nd rdbl lyout nd txt. In ddition to th nlysis of Europ-wid trnds in Prt I, th rport lso includs Prt II with Country Chptrs, covring ch EU Mmbr Stt plus Iclnd nd Norwy. Country Chptrs contin, bsids discussion on tx rvnu trnds, sktch of th min chrctristics of ch country's tx systm. Sinc 2009, th informtion cn b complmntd by full listing of rvnu by tx, th Ntionl Tx List, t th most disggrgtd lvl vilbl, ccssibl fr of chrg from th rport's wb pg ( Finlly, th 'Txs in Europ' dtbs ( contins dtild nd updtd informtion on th 650 most importnt txs in forc in th EU Mmbr Stts. Hinz Zourk Dirctor-Gnrl Dirctort-Gnrl for Txtion nd Customs Union Wltr Rdrmchr Dirctor-Gnrl Eurostt Txtion trnds in th Europn Union 3

6 Origin of this rport Origin of this rport 'Txtion trnds in th Europn Union' is th rsult of cooprtion btwn two Dirctorts-Gnrl of th Europn Commission: th Dirctort-Gnrl for Txtion nd Customs Union (DG TAXUD) nd Eurostt, th Sttisticl Offic of th Europn Union. Th ntionl ccounts dt collctd from th ntionl sttisticl offics by Eurostt wr procssd nd nlysd by DG TAXUD stff. For som indictors, dditionl stimts providd by xprts from ntionl tx dprtmnts, consultd in th contxt of th Working Group on th Structurs of th Txtion Systms run by DG TAXUD, hv bn usd. Th Commission stff wishs to thnk th Working Group xprts for thir vry hlpful orl nd writtn contributions. Nvrthlss, th Commission Srvics br sol rsponsibility for this publiction nd its contnt. This rport dos not ncssrily rflct th viws of th tx dprtmnts in th Mmbr Stts. Any qustions or suggstions rlting to th nlysis should b ddrssd to: Jn-Pirr D Lt, Hd of th unit 'Economic nlysis, vlution & impct ssssmnt support' Europn Commission, DG Txtion nd Customs Union, B-1049 Brussls Emil: txud-structurs@c.urop.u Lngug nd dissmintion 'Txtion trnds in th Europn Union' is vilbl in English only. Th publiction cn b downlodd fr of chrg from th wbsits of th Dirctort-Gnrl for Txtion nd Customs Union ( or Eurostt ( Th ppr vrsion cn b purchsd from ny of th sls outlts listd on th wbsit of th Publictions Offic of th Europn Union ( Additionl informtion Th Ntionl Tx Lists for lmost ll EU countris, showing tx rvnus for ll mjor txs, hs bn publishd onlin, rplcing nd ugmnting th List of Txs contind up to th 2008 dition of this rport (s NTL t: Rdrs intrstd in txtion my lso find dtild informtion on th lgl form nd rvnu of th txs currntly in forc in th EU Mmbr Stts in th Txs in Europ' dtbs ( Acknowldgmnts Dirctort-Gnrl for Txtion nd Customs Union Editor: Mrco Fntini Dputy ditor: Myy Hristov Authors (Prt I): Mrco Fntini, Myy Hristov, Elisbth Joossns Authors (Country chptrs): Anjlin Bngyuzov, Jonn Brlinsk, Günthr Ebling, Mrco Fntini, Srn Ftic, Endr György, Ptr Hrvnov, Bt Himnn, Thoms Hmmlgrn, Myy Hristov, Elisbth Joossns, Ktri Kosonn, Zornits Kutlin- Dimitrov, Ttjn Lpunov, Gëtn Nicodèm, Doris Prmmr, Michl Stffns, Wrnr Vnborrn Spcil contributions: Ktri Kosonn, Doris Prmmr, Wrnr Vnborrn Sttistics: Myy Hristov, Elisbth Joossns Editoril ssistnc: Ttjn Lpunov, Sij Nvl Eurostt ESA95: Luc Ascoli, Irn Kostdinov, Irn Tvrijonviciut, Lur Whrig 4 Txtion trnds in th Europn Union

7 Tbl of contnts TABLE OF CONTENTS Prfc... 3 Glossry Introduction Prt I Ovrll tx rvnu Dvlopmnt of th ovrll tx rvnu in th Europn Union Th txtion of proprty in th EU Prt II Dvlopmnts in th Mmbr Stts Austri Blgium Bulgri Cyprus Czch Rpublic Dnmrk Estoni Finlnd Frnc Grmny Grc Hungry Irlnd Itly Ltvi Lithuni Luxmbourg Mlt Nthrlnds Polnd Portugl Romni Slovki Slovni Spin Swdn Unitd Kingdom Europn Union vrgs Txtion trnds in th Europn Union 5

8 Tbl of contnts Norwy Iclnd Bibliogrphy Annx A Tbls Annx B Mthodology nd xplntory nots Txtion trnds in th Europn Union

9 Tbl of contnts LIST OF TABLES Tbl I-1.1 VAT rts in th Mmbr Stts , in % Tbl I-1.2 Implicit tx rt on lbour in th Union , in % Tbl I-1.3 Top prsonl incom tx rts incom, in % Tbl I-1.4 Tx wdgs for singl xmpl workr t two-thirds of vrg rnings , in % Tbl I-1.5 Adjustd top sttutory tx rt on corport incom , in % Tbl I-1.6 Environmntl tx rvnu in th Union , in % of GDP Tbl I-2.1 Nominl Hous Pric Indics, 2000= Tbl I-2.2 Txs on proprty - totl % of GDP, Tbl I-2.3 Txs on proprty - totl % of totl txtion, Tbl I-2.4 Rcurrnt txs on immovbl proprty % of GDP, Tbl I-2.5 Trnsction txs on proprty in gnrl % of GDP, Txtion trnds in th Europn Union 7

10 Tbl of contnts LIST OF TABLES IN ANNEX A Tbl 1 Totl Txs (including SSC) s % of GDP Tbl 2 Cycliclly djustd totl txs (including SSC) s % of GDP Tbl 3 Totl Txs (xcluding SSC) s % of GDP Tbl 4 Totl Txs (xcluding SSC) s % of Totl Txtion Tbl 5 Indirct Txs s % of GDP - Totl Tbl 6 Indirct Txs s % of Totl Txtion - Totl Tbl 7 Indirct Txs s % of GDP - VAT Tbl 8 Indirct Txs s % of Totl Txtion - VAT Tbl 9 Indirct Txs s % of GDP - Excis dutis nd consumption txs Tbl 10 Indirct Txs s % of Totl Txtion - Excis dutis nd consumption txs Tbl 11 Indirct Txs s % of GDP - Othr txs on Products (incl. import dutis) Tbl 12 Indirct Txs s % of Totl Txtion - Othr txs on products (incl. import dutis) Tbl 13 Indirct Txs s % of GDP - Othr txs on production Tbl 14 Indirct Txs s % of Totl Txtion - Othr txs on production Tbl 15 Dirct Txs s % of GDP - Totl Tbl 16 Dirct Txs s % of Totl Txtion - Totl Tbl 17 Dirct Txs s % of GDP - Prsonl incom txs Tbl 18 Dirct Txs s % of Totl Txtion - Prsonl incom txs Tbl 19 Dirct Txs s % of GDP - Corport incom tx Tbl 20 Dirct Txs s % of Totl Txtion - Corport incom tx Tbl 21 Dirct Txs s % of GDP - Othr Tbl 22 Dirct Txs s % of Totl Txtion - Othr Tbl 23 Socil Contributions s % of GDP - Totl Tbl 24 Socil Contributions s % of Totl Txtion - Totl Tbl 25 Socil Contributions s % of GDP - Employrs Tbl 26 Socil Contributions s % of Totl Txtion - Employrs Tbl 27 Socil Contributions s % of GDP - Employs Tbl 28 Socil Contributions s % of Totl Txtion - Employs Tbl 29 Socil Contributions s % of GDP - Slf-mployd Tbl 30 Socil Contributions s % of Totl Txtion - Slf-mployd Tbl 31 Txs rcivd by dministrtiv lvl s % of GDP - Cntrl Govrnmnt Tbl 32 Txs rcivd by dministrtiv lvl s % of Totl Txtion - Cntrl Govrnmnt Tbl 33 Txs rcivd by dministrtiv lvl s % of GDP - Stt Govrnmnt Tbl 34 Txs rcivd by dministrtiv lvl s % of Totl Txtion - Stt Govrnmnt.221 Tbl 35 Txs rcivd by dministrtiv lvl s % of GDP - Locl Govrnmnt Tbl 36 Txs rcivd by dministrtiv lvl s % of Totl Txtion - Locl Govrnmnt Tbl 37 Txs rcivd by dministrtiv lvl s % of GDP - Socil scurity funds Tbl 38 Txs rcivd by dministrtiv lvl s % of Totl Txtion - Socil scurity funds Tbl 39 Txs rcivd by dministrtiv lvl s % of GDP - EU Institutions Txtion trnds in th Europn Union

11 Tbl of contnts Tbl 40 Txs rcivd by dministrtiv lvl s % of Totl Txtion - EU Institutions Tbl 41 Txs on Consumption s % of GDP - Totl Tbl 42 Txs on Consumption s % of Totl Txtion - Totl Tbl 43 Txs on Consumption s % of GDP - Tobcco nd Alcohol Tbl 44 Txs on Consumption s % of Totl Txtion - Tobcco nd Alcohol Tbl 45 Txs on Lbour s % of GDP - Totl Tbl 46 Txs on Lbour s % of Totl Txtion - Totl Tbl 47 Txs on Lbour s % of GDP - Employd Tbl 48 Txs on Lbour s % of Totl Txtion - Employd Tbl 49 Txs on Lbour s % of GDP - Employd pid by mployrs Tbl 50 Txs on Lbour s % of Totl Txtion - Employd pid by mployrs Tbl 51 Txs on Lbour s % of GDP - Employd pid by mploys Tbl 52 Txs on Lbour s % of Totl Txtion - Employd pid by mploys Tbl 53 Txs on Lbour s % of GDP - Non-mployd Tbl 54 Txs on Lbour s % of Totl Txtion - Non-mployd Tbl 55 Txs on Cpitl s % of GDP - Totl Tbl 56 Txs on Cpitl s % of Totl Txtion - Totl Tbl 57 Txs on Cpitl s % of GDP - Cpitl nd businss incom Tbl 58 Txs on Cpitl s % of Totl Txtion - Cpitl nd businss incom Tbl 59 Txs on Cpitl s % of GDP - Incom of Corportions Tbl 60 Txs on Cpitl s % of Totl Txtion - Incom of Corportions Tbl 61 Txs on Cpitl s % of GDP - Incom of housholds Tbl 62 Txs on Cpitl s % of Totl Txtion - Incom of housholds Tbl 63 Txs on Cpitl s % of GDP - Incom of slf-mployd Tbl 64 Txs on Cpitl s % of Totl Txtion - Incom of slf-mployd Tbl 65 Txs on Cpitl s % of GDP - Stocks of cpitl / wlth Tbl 66 Txs on Cpitl s % of Totl Txtion - Stocks of cpitl / wlth Tbl 67 Environmntl txs s % of GDP Tbl 68 Environmntl txs s % of Totl Txtion Tbl 69 Environmntl txs s % of GDP - Enrgy Tbl 70 Environmntl txs s % of Totl Txtion - Enrgy Tbl 71 Enrgy txs s % of GDP - Trnsport ful txs Tbl 72 Enrgy txs s % of Totl Txtion - Trnsport ful txs Tbl 73 Environmntl txs s % of GDP - Trnsport (xcl. ful) Tbl 74 Environmntl txs s % of Totl Txtion - Trnsport (xcl. ful) Tbl 75 Environmntl txs s % of GDP - Pollution/Rsourcs Tbl 76 Environmntl txs s % of Totl Txtion - Pollution/Rsourcs Tbl 77 Implicit tx rts in % - Consumption Tbl 78 Implicit tx rts in % - Lbour Tbl 79 Implicit tx rts in % - Cpitl Tbl 80 Implicit tx rts in % - Cpitl nd businss incom Tbl 81 Implicit tx rts in % - Corport incom Tbl 82 Implicit tx rts in % - Cpitl nd businss incom of housholds nd slfmployd Tbl 83 Implicit tx rts - Enrgy(1) Txtion trnds in th Europn Union 9

12 Tbl of contnts Tbl 84 Tbl 85 Implicit tx rts, dfltd - Enrgy(1) Tx rvnu snsitivity prcnt chng in tx rvnus (s rtio to GDP) in rction to 1% chng in th output gp Tbl 86 Effctiv vrg tx rts, non-finncil sctor, , in% Txtion trnds in th Europn Union

13 Tbl of contnts LIST OF GRAPHS AND MAPS Grph I-1.1 Ovrll tx-to-gdp rtio (incl. SSC) in th EU, US nd Jpn 2010, % Grph I-1.2 Long-trm trnds in th ovrll tx rtio (including SSC) % of GDP Grph I-1.3 Cycliclly djustd tx rvnus , in % of GDP, GDP-wightd vrg Mp I-1.1 Distribution of totl tx burdn, Grph I-1.4 Lvl in 2000 nd chng of tx-to-gdp rtio until 2010 in % Grph I-1.5 Structur of tx rvnus by mjor typ of txs 2010, % of totl tx burdn Grph I-1.6 Distribution of th totl tx burdn ccording to typ of tx bs 2010, % of totl tx burdn Grph I-1.7 Implicit tx rt on consumption , in % Grph I-1.8 Dcomposition of th ITR on Consumption Grph I-1.9 Dvlopmnt of vrg stndrd VAT rt, EU Grph I-1.10 VAT rvnu rtio, 2010, in % Grph I-1.11 Implicit tx rt on Lbour , in % (rithmtic vrgs - djustd for missing dt) Mp I-1.2 Tx burdn on lbour, Mp I-1.3 Distribution of PIT rts, Grph I-1.12 Dvlopmnt of top prsonl incom tx rt , in % Grph I-1.13 Composition of th implicit tx rt on lbour 2010, in % Grph I-1.14 Evolution of th composition of th implicit tx rt on lbour , diffrncs in prcntg points Grph I-1.15 Evolution of micro nd mcro indictors of tx burdn on lbour EU-27, , indx 1996= Mp I-1.4 Distribution of chngs in CIT rts Mp I-1.5 Distribution of corport tx rts Grph I-1.16 Implicit tx rt on cpitl , in % (rithmtic vrg - djustd for missing dt Grph I-1.17 Corport Incom Tx rts nd Avrg Effctiv Txtion indictors, EU-27, , in % Grph I-1.18 Implicit tx rt on cpitl 2010, in % Grph I-1.19 Implicit tx rt on cpitl nd businss incom 2010, in % Grph I-1.20 Environmntl tx rvnus, , % of GDP Grph I-1.21 Evolution of th structur of nvironmntl txs , diffrnc in % of GDP Grph I-1.22 Enrgy tx rvnus in rltion to finl nrgy consumption (rl ITR on nrgy) Euro pr tonn of oil quivlnt, dfltd with cumultiv % chng in finl dmnd dfltor (2000=100) Grph I-1.23 Enrgy tx rvnus by Mmbr Stt 2010, in % of GDP Mp I-1.6 Distribution of xcis duty of gs oil, Jn Grph I-2.1 Growth in hous prics nd rvnu from rcurrnt immovbl proprty txs, Txtion trnds in th Europn Union 11

14 Tbl of contnts 12 Txtion trnds in th Europn Union

15 Glossry Glossry Country bbrvitions Commonly usd cronyms BE Blgium EU Europn Union BG Bulgri EMU Economic nd montry union CZ Czch Rpublic DK Dnmrk MS Mmbr Stt DE Grmny EU-25 Europn Union (BE, CZ, DK, DE, EE, IE, EL, ES, FR, IT, CY, LV, LT, LU, HU, MT, NL, AT, PL, PT, SI, SK, F EE Estoni EU-27 Europn Union (BE, BG, CZ, DK, DE, EE, IE, EL, ES, FR, IT, CY, LV, LT, LU, HU, MT, NL, AT, PL, PT, RO, IE Irlnd EU-15 Europn Union (BE, DK, DE, IE, EL, ES, FR, IT, LU, NL, AT, PT, FI, SE, UK) EL/GR Grc EA-17 Euro r (BE, DE, IE, EE, EL, ES, FR, IT, CY, LU, MT, NL, AT, PT, SI, SK, FI) ES Spin NMS-12 Nw Mmbr Stts (BG, CZ, EE, CY, LV, LT, HU, MT, PL, RO, SI, SK) FR Frnc NMS-10 Nw Mmbr Stts (CZ, EE, CY, LV, LT, HU, MT, PL, SI, SK) IT Itly ECSC Europn Col nd Stl Community CY Cyprus EEA Europn Economic Ar LV Ltvi LT Lithuni PIT Prsonl Incom Tx LU Luxmbourg CIT Corport Incom Tx HU Hungry ESA79 Europn Systm of Accounts 1979 MT Mlt ESA95 Europn Systm of Accounts 1995 NL Nthrlnds GDP Gross Domstic Product AT Austri ITR Implicit Tx Rt PL Polnd SSC Socil Scurity Contributions PT Portugl VAT Vlu Addd Tx RO Romni NTL Ntionl Tx List SI Slovni SK Slovki : Not vilbl FI Finlnd n.. Not pplicbl SE Swdn UK Unitd Kingdom IS Iclnd (not mmbr of th EU) NO Norwy (not mmbr of th EU) Txtion trnds in th Europn Union 13

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17 Introduction Introduction This publiction prsnts tim sris of tx rvnu dt from Ntionl Accounts for th twnty-svn Mmbr Stts, Norwy nd Iclnd. It provids brkdown of txs ccording to diffrnt clssifictions: by typ of txs (dirct txs, indirct txs, socil contributions), by lvl of govrnmnt (cntrl, stt, locl, socil scurity funds, EU institutions), nd by typ of tx bs (consumption, lbour, cpitl). It lso compils dt for th subgroups of nvironmntl nd proprty txs. Th brkdown of tx rvnu dt in prcntg of GDP provids msurs of th tx burdn nd of th structur of txtion in th diffrnt Mmbr Stts, s wll s dvlopmnts ovr tim, rw nd cycliclly-djustd. As for th tx burdn by tx bs, bsids providing brkdown, th rport computs implicit tx rts (ITR). ITRs provid msur of th ffctiv vrg tx burdn on diffrnt typs of conomic incom or ctivitis; in ch cs, th ITR xprsss ggrgt tx rvnus s prcntg of th potntil tx bs. Th dt on tx rvnus by typ of tx nd by lvl of govrnmnt r obtind by ggrgting th tx trnsctions in Ntionl Accounts. Ths r providd by Mmbr Stts to Eurostt nd follow th clssifiction prscribd by th 'Europn Systm of Accounts' (ESA95)( 1 ). Th conomic clssifiction of txs nd th ctgoristion of nvironmntl nd proprty txs is not stndrd nd is computd spcificlly for this publiction, using mor dtild tx rvnu dt providd by th Mmbr Stts long with Ntionl Accounts dt, th Ntionl Tx List. Th computtion of th ITRs rquirs dditionl ssumptions nd clcultions. Ministris of Finnc in th Mmbr Stts hv in prticulr hlpd to produc th rquird dt. A comprhnsiv ovrviw of th mthodology nd dt usd for this purpos is vilbl t th following pg: This dition of th publiction 'Txtion trnds in th Europn Union' covrs th priod, corrsponding to th yrs for which Ntionl Accounts dt r gnrlly vilbl in th ESA95 formt. Th publiction is dividd in two prts. Prt I rviws th mjor trnds nd dvlopmnts in txtion cross th EU. It lso includs for th first tim this yr dt on proprty txtion for ll EU Mmbr Stts. Prt II contins 29 country chptrs, which rviw th min trnds in th dvlopmnt of th ovrll tx burdn nd giv n ovrviw of th tx systm nd of th min rcnt policy chngs. Th tbl of sttistics providd for ch country contins four blocks of dt: A - Structur of rvnus in % of GDP, including cycliclly djustd tx rvnus; B - Structur ccording to lvl of govrnmnt in % of totl txtion; C - Structur by typ of tx bs in % of GDP, including th sub-group of nvironmntl txs; D - Implicit tx rts. Annx A prsnts th sm dt orgnisd diffrntly: ch tbl prsnts singl tx ctgory, in % of GDP or in % of totl txs, or n implicit tx rt, for ll yrs nd Mmbr Stts for which thy r vilbl togthr with rithmtic nd wightd EU vrgs. Annx B givs informtion bout th sourc of th dt usd for th clcultions prsntd in th rport s wll s bout ny country spcific djustmnts md during th computtions. A mor dtild mthodology cn b found on th Europn Union's Europ wbsit t th following pg: This dscribs in dtil th pproch followd in clculting th rtios includd in Annx A nd th mthods mployd by th Ministris of Finnc nd th Commission Srvics to lloct th rvnu of th prsonl incom tx to lbour, cpitl or othr sourcs of txbl incom togthr with th lists of ll txs for which rvnu dt wr submittd by th Mmbr Stts nd thir rspctiv lloction to th diffrnt tx bs, proprty nd nvironmntl tx ctgoris. ( 1 ) Europn Commission (1996). Txtion trnds in th Europn Union 15

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19 Ovrll tx rvnu

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21 Ovrll tx rvnu Prt I 1. Dvlopmnt of th ovrll tx rvnu in th Europn Union Lvl nd long-trm trnds Th EU is high tx r Th Europn Union is, tkn s whol, high tx r. In 2010, th ovrll tx rtio, i.. th sum of txs nd socil scurity contributions in th 27 Mmbr Stts (EU-27) mountd to 38.4 % in th GDPwightd vrg, mor thn 40 % bov th lvls rcordd in th Unitd Stts nd Jpn. Th tx lvl in th EU is high not only comprd to thos two countris but lso comprd to othr dvncd conomis; mong th mjor non-europn OECD mmbrs, only Cnd nd Nw Zlnd hv tx rtios tht xcd 30 % of GDP ( 2 ). As for lss dvlopd countris, thy r typiclly chrctrisd by rltivly low tx rtios. Grph 1.1: Ovrll tx-to-gdp rtio (incl. SSC) in th EU, US nd Jpn 2010, % 40% 30% 20% 10% 38.4% 24.8% 26.9% primrily on rstricting or scling bck primry public xpnditurs, in othrs th focus ws rthr on incrsing txs (in som css tmporrily). By th nd of tht dcd, howvr, numbr of countris took dvntg of buoynt tx rvnus to rduc th tx burdn, through cuts in th prsonl nd corport incom tx s wll s in socil scurity contributions. Grph 1.2: Long-trm trnds in th ovrll tx rtio (including SSC) % of GDP 44% 42% 40% 38% 36% 34% EU-9 (ESA79) EU-15 (ESA79) EU-27 (ESA95) EU-15 (ESA95) Not: Th sttisticl brk is du to th chng from ESA79 to ESA95. All dt r GDP-wightd. Sourc: : Commission srvics (rproducd from 2007 dition of th rport); : Eurostt (gov tx_g) Th ovrll tx rtio strtd dcrsing from 2000 but only for coupl of yrs. Owing t lst prtly to th nd, in svrl countris, to rduc th gnrl govrnmnt dficit, fforts to cut txs ptrd out. Tx rtios pickd up gin until 2007 (s Grph 1.2). O v r l l t x r v n u 0% EU-27 US JP Not: EU-27 wightd vrg Sourc: Commission Srvics nd Eurostt (ESA95) (gov tx_g) for th EU, OECD (SNA2008) for th US nd Jpn Incrsing trnd from th 1970s until th nd of th cntury High EU tx lvls r not nw, dting bck ssntilly to th lst third of th 20th cntury. In thos yrs, th rol of th public sctor bcm mor xtnsiv, lding to strong growth of tx rtios in th 1970s, nd to lssr xtnt lso in th 1980s nd rly 1990s. In th lt 1990s, first th Mstricht Trty nd thn th Stbility nd Growth Pct ld EU Mmbr Stts to dopt sris of fiscl consolidtion pckgs. In som Mmbr Stts, th consolidtion procss rlid ( 2 ) S OECD (2011). Tx rvnus droppd s rsult of th crisis, but stbilisd lrdy in 2010 Th first ffcts of th globl conomic crisis wr flt on rvnus lrdy in 2008 vn though in th EU th nnul growth turnd ngtiv only th following yr. As discussd in th 2011 dition of this rport ( 3 ) minly msurs on th xpnditur sid wr tkn by th Mmbr Stts during th trough of th rcssion. Thos countris tht introducd tx cuts dirctd thm t cutting lbour txs nd, to smllr xtnt, cpitl txtion. Th ovrll tx rtio rchd its lowst vlu sinc th bginning of th dcd in Initil consolidtion msurs nd modst rcovry of th conomy stbilisd tx rvnus in 2010, s xpnditur sid sw consolidtion in lmost ll countris (s Box 1.1). ( 3 ) S Europn Commission (2011c) Txtion trnds in th Europn Union 19

22 Prt I Ovrll tx rvnu O v r l l t x r v n u As dtild in subsqunt sctions of this chptr, th dvlopmnts sinc 2009 diffr significntly by typ of tx. Consumption txs such s VAT nd xcis dutis significntly incrsd sinc 2009; in ddition, numbr of Mmbr Stts risd th top rt in th r of prsonl incom txtion. CIT rts continud to dclin ftr 2009 but t lowr pc in comprison with th bginning of th dcd nd in 2012 th EU vrg vn incrsd mrginlly. Howvr, th tx rvnu dt prsntd in this rport r vilbl only until 2010 nd hnc th ffct of mny of th bov mntion rt hiks is still not visibl. Ovrll, th txto-gdp rtio (unwightd vrg) dclind by 1.4 prcntg points with rspct to 2000 nd by 0.2 comprd to Cyclicl fctors bhind rvnu dvlopmnts Compring cycliclly djustd tx rvnus ( 4 ) with ctul ons rvls th ffcts of th conomic cycl bhind tx rvnu dvlopmnts (Grph 1.3). Whil tx hiks wr bhind th rvnu incrs in th priod, it ws ntirly du to th cycl tht tx rvnu ros from 2004 until Th tx-to-gdp rtios show structurl rduction in th midst of th conomic nd finncil crisis ( ), whil trnd rvrsl is visibl in , mostly drivn by hiks in VAT nd PIT rts on th bck of consolidtion msurs doptd. Grph 1.3: Cycliclly djustd tx rvnus , in % of GDP, GDP-wightd vrg govrnmnt tx rvnu, msur tht is slightly diffrnt but closly linkd to th ovrll tx rtio usd in this rport ( 6 ), to incrs mrkdly (by on point of GDP, in th wightd vrg), until Also gnrl govrnmnt xpnditur hs incrsd considrbly: from 2007 to 2010 it ros by mor thn fiv points of GDP, surpssing th 50 % mrk. Howvr, th xpnditur rtio strtd dclining lrdy in 2011 nd th trnd is forcst to continu until 2013 whn th xpnditur rtio is forcst to b two points of GDP lowr thn in Wid dispritis in tx lvls cross Mmbr Stts Diffrncs in lvls cross th Union r quit mrkd; th ovrll tx rtio rngs ovr mor thn twnty points of GDP, from 27.1 % in Lithuni to 47.6 % in Dnmrk (s Mp 1.1 nd Tbl 1 in Annx A). In othr words, th tx burdn in th highst-txing EU Mmbr Stt is ovr 75 % highr thn in th lst txing on. Mp 1.1: Distribution of totl tx burdn, in % of GDP in % of GDP Cyclicl componnt EU-25 Cycliclly djustd rvnus EU-25 Tx rvnu EU-25 Sourc: Commission srvics Upwrd rvnu trnd xpctd ftr 2010 As for futur trnds, th EU Commission forcst from Novmbr 2011 ( 5 ) projcts th EU-27 gnrl ( 4 ) Th Hodrick Prscott (HP) filtr is usd in this rport to idntify th undrlying trnd in GDP nd rvnus. This HP filtr is purly sttisticl mthod, which cn b sily pplid to ny tim sris, including GDP nd tx bss. Th HP mthod nds to b clrly distinguishd from th Production Function Approch (PFA), which is th rfrnc mthodology (ndorsd by ECFOFIN Council on 12 July 2002) for th cyclicl djustmnt of public finnc ggrgts. For mor dtils, s Europn Commission (2011c) nd th dtild mthodology of th rport vilbl [ ( 5 ) S Europn Commission (2011) ( 6 ) Gnrl govrnmnt tx rvnu for dos not xclud voluntry socil contributions nd do not covr indirct txs lvid by ntionl govrnmnts on bhlf of th EU institutions. 20 Txtion trnds in th Europn Union

23 Ovrll tx rvnu Prt I Box 1.1: Chng in nt lnding/nt borrowing, Aftr two yrs of incrsd govrnmnt xpnditur iming to llvit th impct of th crisis nd consquntly dtriorting budgtry positions, th mjority of th EU Mmbr Stts fcd th nd to consolidt thir budgts. In 2010, in ll but six Mmbr Stts th gnrl govrnmnt blnc improvd through both cuts in xpnditur nd rvnu incrss. Only on country Irlnd - witnssd significnt incrs in xpnditur, which ws drivn by th xtrordinry msurs nctd to support th bnking sctor. As for th rvnu sid, th dclin in govrnmnt rvnu xprincd in 13 countris ws qul to th growth of rcipts in th rmining 14 Mmbr Stts, so tht th vrg for th EU dos not show chng in th vrg. Only in six countris th drop in rvnus xcdd th 1 % mrk but oftn this ws coupld with lrg dcrss in spnding. For dtild discussion of govrnmnt rvnu nd xpnditur dvlopmnt, pls s Europn Commission (2011b). Figur: Chng in nt lnding/nt borrowing ESA95, 2010 ( 1 ) 6 O v r l l t x 4 % point r v n u EL LT EE RO ES BE LV BG UK CZ IT SE CY NL FR PT SI SK HU MT DK FI LU AT PL DE IE EU- 27 Gnrl govrnmnt rvnu contribution Gnrl govrnmnt xpnditur contribution Chng in nt lnding (+) /nt borrowing (-) EA- 17 Sourc: Eurostt (gov min) ( 1 ) Gnrl govrnmnt xpnditur contribution for Irlnd is -17.9% lding to chng in nt lnding/nt borrowing of -17.1% Ths lrg diffrncs dpnd minly on socil policy choics lik public or privt provision of srvics such s old g pnsions, hlth insurnc nd duction, on th xtnt of public mploymnt, or of Stt ctivitis, tc. Tchnicl fctors lso ply rol: som Mmbr Stts provid socil or conomic ssistnc vi tx rductions rthr thn dirct govrnmnt spnding, whil socil trnsfrs r xmptd from txs nd socil scurity contributions in som Mmbr Stts but not in othrs. It should lso b highlightd tht th GDP vlu, tht constituts th dnomintor of th ovrll tx rtio, includs stimts of production by th informl sctor (th 'gry' nd 'blck' conomy); so tht not only low txs, but lso high tx vsion cn rsult in low ovrll tx rtio. Tx-to-GDP rtios gnrlly r significntly highr in th EU-15 Mmbr Stts (i.. th 15 Mmbr Stts tht joind th Union bfor 2004) thn in th NMS-12 Mmbrs (th 12 Mmbr Stts tht joind th EU in 2004 nd 2007); th first nin positions in trms of ovrll tx rtio r indd occupid by EU-15 countris (s Tbl 1 in Annx A). Th xcptions r Irlnd nd Grc, whos tx rtios r mongst th lowst in th EU; th Portugus ovrll tx rtio, hving incrsd by hlf point in 2010, is now rnking just bov Grc's. Consquntly, sinc th uro r (EA-17) is mostly composd of old Mmbr Stts, it shows slightly highr ovrll tx rtio thn th EU-27 (just bov hlf prcntg point diffrnc in th rithmtic vrg). Txtion trnds in th Europn Union 21

24 Prt I Ovrll tx rvnu O v r l l t x r v n u Grph 1.4: Lvl in 2000 nd chng of tx-to-gdp rtio until 2010 in % Chngs from MT CY 4 EE 2 PT CZ SI IT 0 PL UK BE NL AT FR LV ES LU HU -2 LT DK RO EL IE DE -4 BG FI SE -6 SK Totl txs in proportion to GDP - Bs yr 2000 Sourc: Commission srvics nd Eurostt (gov tx_g) Convrgnc of tx rtios sinc 2000 intrruptd during th crisis Th ovrll tx rtio tndd to convrg from th bginning of th cntury until 2007, s shown by flling rtio btwn th stndrd dvition nd th mn. In , howvr, tx rtios divrgd gin, possibly owing to th rthr diffrnt dpth of th rcssion mong Mmbr Stts nd to th divrs policy rction to th crisis. Grph 1.4 chrts, for vry country, th chngs in th tx-to-gdp rtios btwn 2000 nd 2010 in prcntg points of GDP, in comprison with thir strting point in th bs yr Th min purpos of th grph is to show to wht xtnt countris strting with highr thn vrg tx rtio tnd to rduc it ovr tim. Svrl fcts r highlightd by th grph. First, ll countris, xcpt Itly (nd Slovni lthough lss pronouncd), tht hd bov vrg tx rtio in 2000 rducd it ovr th priod until Swdn nd Finlnd hv cut th tx burdn significntly sinc 2000, by 5.6 nd 5.1 points rspctivly. Scondly, th dvlopmnt of th tx rtio for th group of countris hving blow vrg tx-to-gdp in 2000 is lss uniform. Four countris incrsd thir tx rtio, thr of which mrkdly. Th incrs in rvnu in Cyprus stnds out for its siz (5.8 % points of GDP) whil nothr lrg incrs, 5.4 % points of GDP, took plc in nothr Mditrrnn country, Mlt. In Estoni too th incrs ws rltivly mrkd t 3.2 % points; it ws lmost ntirly rlisd in Spin, lso with blow 2000 vrg rtio, sw significnt incrs in rvnu from 2000 to 2007, ovr 3 % points of GDP, but this ws mor thn rvrsd by th stp drop in rvnu sinc thn, mounting to round 5.2 % points of GDP. As for rductions, ovr th ntir priod th most rmrkbl cs is Slovki, which, ftr hving cut th ovrll tx rtio by 6.2 % points of GDP from 1995 to 2000, rducd th tx burdn by n dditionl six prcntg points of GDP ftr Bulgri, too, rducd significntly its lrdy low tx rtio by 4.2 points. Lstly, th lck of convrgnc ovr th priod is du prdominntly to th fct tht Mmbr Stts with low tx rtio in 2000 dcrsd it vn furthr until In most of th css th dclin ws rlisd from 2008 onwrds, s th crisis took its toll. 22 Txtion trnds in th Europn Union

25 Ovrll tx rvnu Prt I Box 1.2: Rvnu structur by lvl of govrnmnt. In 2010 bout 60 % of th 'ultimtly rcivd' ggrgt tx rvnu in th EU-27 (including socil contributions) ws climd by th cntrl or fdrl govrnmnt, roughly 30 % ccrud to th socil scurity funds, nd round 10 % to locl govrnmnt. Lss thn 1 % of rvnu ccrus to th institutions of th Europn Union. Thr r considrbl diffrncs in structur from on Mmbr Stt to nothr; for instnc, som Mmbr Stts r fdrl or grnt rgions vry high dgr of fiscl utonomy (Blgium, Grmny, Austri, Spin). In th Unitd Kingdom nd Mlt, th socil scurity systm is not sprt from th cntrl govrnmnt lvl from n ccounting viwpoint, whrs in Dnmrk most socil scurity is finncd through gnrl txtion Cntrl govrnmnt MT UK IE CY DK BG CZ EE LU PT EL RO HU NL SE IT PL LT AT SI LV SK FI ES FR DE BE EU- EA Sub-cntrl lvl IS NO O v r l l t x r v n u SE BE DE ES DK FI AT LV IT CZ EE PL LT SI FR SK PT HU UK LU RO NL IE BG CY EL MT EU- 27 Locl govrnmnt Stt govrnmnt EA- 17 IS NO Socil scurity funds FR SK BE DE SI LT ES NL PL EL RO IT LV HU FI AT LU PT BG CY EE CZ IE SE DK MT UK EU- EA IS NO Not: EU vrgs for stt govrnmnt r computd only ovr thos Mmbr Stts which hv this lvl of govrnmnt nd not ovr ll 27 Mmbr Stts. Sourc: Eurostt (gov tx g) (Continud on th nxt pg) Txtion trnds in th Europn Union 23

26 Prt I Ovrll tx rvnu O v r l l t x r v n u Box (continud) Th shr of sub-fdrl rvnu (dfind s municiplitis plus th stt lvl whr it xists) vris from lss thn 1 % to just ovr on third of th totl. Swdn, Spin, Grmny, nd Blgium in prticulr show high shrs of totl txs rcivd by th non-cntrl uthoritis. At th othr nd, this shr is just blow 1 % in Grc, whil in Mlt locl govrnmnt dos not rciv dirctly ny tx funds. As for th shr of rvnu ccruing to socil scurity funds, th highst vlus in th EU r rportd by Frnc nd Slovki. Th mount of th ultimtly rcivd shrs of rvnu, howvr, is vry imprfct indictor of fiscl utonomy, s givn govrnmnt lvl my b ssignd rvnu strms which it hs littl lgl uthority to incrs or dcrs. In svrl EU Mmbr Stts dcntrlistion hs bn n importnt ftur for svrl yrs lrdy. Accordingly, dt show tht th shr of totl tx rvnu ccruing to stt nd locl govrnmnt hs bn grdully incrsd. Howvr, in 2010 th trnd hs bn rvrsd givn tht tx rvnus wr mintind minly by procds from VAT nd xcis dutis nd ths ccru mostly to th cntrl govrnmnt lvl. Rvnu structur by typ of tx Txs r trditionlly clssifid s dirct ( 7 ) or indirct ( 8 ); gnrlly, th first group llows grtr rdistribution s it is imprcticl to introduc progrssivity in indirct txs. Thrfor, th rcours to dirct txs, which r mor 'visibl' to th lctort, tnds to b grtr in th countris whr tx rdistribution objctivs r mor pronouncd; this usully rsults lso in highr top prsonl incom tx rts. Socil scurity contributions r, s rul, dirctly linkd with right to bnfits such s old g pnsions or unmploymnt nd hlth insurnc; in thory, strict ppliction of cturil quivlnc would prclud rdistribution, but in prctic th modlitis for clculting contributions nd bnfits llow considrbl lwy in this rspct nd th sitution is quit divrsifid mong Mmbr Stts. Wight of dirct txtion typiclly lowr in th NMS-12 Mmbr Stts Gnrlly, th NMS-12 Mmbr Stts hv diffrnt structur comprd with th EU-15; in prticulr, whil most EU-15 Mmbr Stts ris roughly qul shrs of rvnus from dirct txs, indirct txs, nd socil scurity contributions, th NMS-12 countris, with th notbl xcption of Mlt, typiclly disply lowr shr of dirct txs in th totl (s Grph 1.5). Th lowst shrs of dirct txs r rcordd in Lithuni (only 17.4 % of th totl, mrkdly down from 31 % in 2008), Bulgri (18.8 % of th totl), Slovki (19.1 %) nd Estoni (19.9 %). All of ths countris hv doptd flt rt systms, which typiclly induc strongr rduction in dirct thn indirct tx rts. Also mong th EU-15 Mmbr Stts thr r som noticbl diffrncs. Th Nordic countris s wll s th Unitd Kingdom hv rltivly high shrs of dirct txs in totl tx rvnus. In Dnmrk nd, to lssr xtnt, lso in Swdn nd th Unitd Kingdom th shrs of socil scurity contributions to totl tx rvnus r low. Thr is spcific rson for th xtrmly low shr of socil scurity contributions in Dnmrk: most wlfr spnding is finncd out of gnrl txtion. This rquirs high dirct tx lvls nd indd th shr of dirct txtion to totl tx rvnus in Dnmrk is by fr th highst in th Union. Among th EU-15 Mmbr Stts, th Grmn nd Frnch tx systms rprsnt in this rspct th opposit of Dnmrk's with high shrs of socil scurity contributions in th totl tx rvnus, nd rltivly low shrs of dirct tx rvnus. Distribution of th tx burdn by typ of tx bs Significnt diffrncs btwn Mmbr Stts Th thr pnls in Grph 1.6 show th shr of th ovrll tx rvnu from th thr diffrnt tx bss (consumption, lbour nd cpitl). Mmbr Stts r rnkd by ovrll tx burdn nd brkdown of th rvnu by tx bs for th yr 2010 is shown. Th grph shows quit lot of vrition both in trms of th ovrll lvl nd in its composition. In prticulr, dspit th fct tht th most importnt indirct txs r hrmonisd t EU lvl, thr is substntil vrition in th mount of rvnus risd from consumption txs. ( 7 ) Prsonl incom txs, corport incom txs nd othr incom nd cpitl txs. ( 8 ) VAT, xcis dutis nd consumption txs, othr txs on products nd production. 24 Txtion trnds in th Europn Union

27 Ovrll tx rvnu Prt I Grph 1.5: Structur of tx rvnus by mjor typ of txs 2010, % of totl tx burdn Shr of indirct txs O v r l l 0 BG HU RO LT CY PL PT LV MT EE IE SE EL SI SK UK FR DK AT CZ IT ES NL FI LU BE DE EU- 27 Shr of dirct txs EA- 17 IS NO t x DK UK SE MT LU FI IE BE IT NL CY ES AT DE PT LV FR EL HU RO PL SI CZ EE SK BG LT EU EA IS NO r v n u Shr of socil scurity contributions CZ SK DE SI FR ES EE LT NL EL PL AT BE RO HU IT LV FI LU PT BG CY IE UK MT SE DK EU- 27 EA- 17 IS NO Sourc: Commission srvics This is du to th fct tht hrmonistion usully dos not trnslt into th stting of ctul tx rts (.g. qulizing thm), but tht lgl form nd som minimum rquirmnts r imposd (.g. minimum xcis dutis on minrl oils). Typiclly NMS-12 countris show high shr of consumption txs. Aprt from th fct tht gnrlly finl domstic consumption mounts to lrg shr of GDP in th NMS-12 purly sttisticlly, th comprtivly lowr txtion of lbour in ths countris symmtriclly tnds to boost th shr of consumption txtion. Also, th nrgy intnsity of th conomy in ths Mmbr Stts is gnrlly highr (s n importnt lmnt of consumption txs is rprsntd by minrl oil xcis dutis). Evn grtr vrition is visibl in rvnus from cpitl nd businss incom, whil som smllr rvnu sourcs, such s txtion of stocks of cpitl/wlth nd txtion of non-mployd lbour Txtion trnds in th Europn Union 25

28 Prt I Ovrll tx rvnu O v r l l t x r v n u Grph 1.6: Distribution of th totl tx burdn ccording to typ of tx bs 2010, % of totl tx burdn 60% 50% 40% 30% 20% 10% 0% 60% 50% 40% 30% 20% Shr of consumption tx rvnu Shr of lbour tx rvnu BG LT * RO EE MT LV HU EL PL CY SI PT SK IE CZ UK DK FI NL SE DE AT ES LU FR BE IT EU- 27 EA- 17 NO 10% 0% AT SE DE NL FR BE EE FI LV CZ ES SI DK IT LT HU SK LU RO IE PT UK EL PL CY BG MT EU- 27 Lbour mployd Lbour non-mployd EA- 17 NO 60% Shr of cpitl tx rvnu 50% 40% 30% 20% 10% 0% LU UK MT CY PL IT ES IE PT EL BE FR SK DK RO DE FI CZ AT SE BG NL HU SI LT LV EE EU- 27 Cpitl nd businss incom Stocks of cpitl EA- 17 NO Sourc: Commission srvics 26 Txtion trnds in th Europn Union

29 Ovrll tx rvnu Prt I (ssntilly pnsions nd socil scurity bnfits) rng from significnt to ngligibl. This primrily rflcts th choic md in th diffrnt Mmbr Stts to provid socil bnfits nd pnsions ithr on gross or nt bsis. Ovrll, th txs lvid on (mployd) lbour incom, usully withhld t sourc form biggr sourc of rvnu, contributing lmost 50 % of rcipts, followd by consumption t roughly on third nd thn cpitl t round on fifth. Txtion of consumption Incrs of consumption txs in 2010 On r whr th onst of th conomic nd finncil crisis hs hd strong impct hs bn consumption txtion. As dtild in th following, thr hs bn brod incrsing trnd in rts sinc Dt for th ITR on consumption ( 9 ), lthough significntly ffctd by th cycl ( 10 ), show tht consumption txs, which hd bn on downwrd trnd sinc 2007, incrsd shrply in 2010 (s Grph 1.7). Grph 1.7: Implicit tx rt on consumption , in % Wight of VAT in txtion of consumption Not surprisingly, th VAT componnt is th lrgst ccounting for mor thn hlf of th ovrll indictor's vlu. Howvr, non-vat txs r not ngligibl; thir shr in th ITR rngs from 26.6 % in Swdn to 41.4 % in th Unitd Kingdom. Txs on nrgy (typiclly, xcis dutis on minrl oils), tobcco nd lcohol mk up, on vrg, round on qurtr of th rvnu from consumption txs. Th diffrncs in consumption of xcisbl goods r such tht thir rvnu ffcts go wll byond th sprd in tx rts: in prcnt of GDP Bulgri riss from lcohol nd tobcco xcis dutis bout fiv tims s much rvnu s th Nthrlnds. Grph 1.8: Dcomposition of th ITR on Consumption % 30% 25% 20% 15% 10% 5% 0% DK SE LU HU NL EE FI SI BG IE AT BE CZ PL DE FR RO MT CY UK LT SK PT LV IT EL ES EU- 27 VAT componnt Enrgy componnt Tobcco nd lcohol componnt Rsidul Sourc: Commission srvics O v r l l t x r v n u EU-27 EA-17 Sourc: Commission srvics Th upwrd trnd in 2010 ws quit brod; comprd with th yr bfor; th ITR incrsd in most of th Mmbr Stts (s Tbl 77 in Annx A). Only in ight countris th indictor dcrsd. In four css (Dnmrk, Grmny, Cyprus nd Hungry) did th rtio dcrs vry mrginlly, whil in Estoni, Mlt, Austri nd Finlnd th drop ws rltivly mrkd, bout hlf prcntg point. ( 9 ) Implicit tx rts, in gnrl, msur th ffctiv vrg tx burdn on diffrnt typs of conomic incom or ctivitis, i.. on lbour, consumption nd cpitl, s th rtio btwn rvnu from th tx typ undr considrtion nd its (mximum possibl) bs. Th ITR on consumption is th rtio btwn th rvnu from ll consumption txs nd th finl consumption xpnditur of housholds. ( 10 ) As discussd in th 2010 dition of this rport th shrpnss of th drop in ws probbly th rsult of combintion of fctors, such s shift in consumption pttrns towrds primry goods, typiclly subjct to lowr VAT rts, or involuntry invntory build-ups by businsss, which du to th svrity of th downturn t th nd of 2008 might hv ld to significnt VAT rfunds by tx dministrtions Shrp hiks of VAT rts ovr th lst four yrs Th brod ris of th ITR on consumption in 2010 cn b lrgly ttributd to hiks of VAT rts. Stgnnt sinc 2002, VAT stndrd rts hv oftn incrsd from 2009 onwrds ( 11 ). Th EU-27 vrg hs risn strongly by 1.5 points in only four yrs nd currntly stnds t 21 %. Anothr spct is th rpid sprd to lrg numbr of countris. Whil in 2008 only Portugl chngd th stndrd VAT rt, six did in 2009 nd nothr ight countris incrsd thir rts in 2010 (mong which Grc by four points nd Romni by fiv). ( 11 ) Only in two css ws th VAT rt dcrsd. In th Unitd Kingdom th rt ws tmporrily cut by two points in 2009 in ordr to support consumption nd in Irlnd th rt ws dcrsd by hlf point in 2010 ftr tmporry incrs in Both countris r currntly pplying highr rts. Txtion trnds in th Europn Union 27

30 Prt I Ovrll tx rvnu O v r l l t x r v n u Box 1.3: VAT rvnu rtio Th VAT rvnu rtio consists of ctul VAT rvnus collctd (VAT rv) dividd by th product of th VAT stndrd rt (VAT rt) nd nt finl consumption, i.. finl consumption xpnditur (P3) minus VAT rcipts: VAT rvnu rtio VATrv P3 VAT = (. VATrt rv) A low vlu of th rtio suggsts tht xmptions, rducd rts, or tx vsion hv significnt impct. Th VAT rvnus collctd r rportd in Tbl 7 of Annx A nd th VAT stndrd rts r providd in Tbl 1.1 of th gnrl prt of this rport. Th finl consumption xpnditur (P3) includs th houshold finl consumption xpnditur (privt consumption), non-profit institutions srving housholds (NPISH) finl consumption xpnditur nd gnrl govrnmnt finl consumption xpnditur (gnrl govrnmnt consumption). Totl finl consumption xpnditur dt cn b downlodd from Eurostt [nm_fcs_c]. Tbl 1.1: VAT rts in th Mmbr Stts , in % Mmbr Stt VAT rt BE Stndrd Rducd 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 BG Stndrd Rducd CZ Stndrd Rducd DK Stndrd Rducd DE Stndrd Rducd EE Stndrd Rducd IE Stndrd Rducd 12.5 (4.2) 12.5 (4.3) 12.5 (4.3) 13.5 (4.3) 13.5 (4.4) 13.5 (4.8) 13.5 (4.8) 13.5 (4.8) 13.5 (4.8) 13.5 (4.8) 13.5 (4.8) 13.5 (4.8) 13.5/9 (4.8) EL Stndrd Rducd 8 (4) 8 (4) 8 (4) 8 (4) 8 (4) 9 (4.5) 9 (4.5) 9 (4.5) 9 (4.5) 9 (4.5) 5.5/11 6.5/13 6.5/13 ES Stndrd Rducd 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 7 (4) 8 (4) 8 (4) 8 (4) FR Stndrd Rducd 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5 (2.1) 5.5/7 (2.1) IT Stndrd Rducd 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) 10 (4) CY Stndrd Rducd /8 5/8 5/8 5/8 5/8 5/8 5/8 LV Stndrd Rducd LT Stndrd Rducd 5 5/9 5/9 5/9 5/9 5/9 5/9 5/9 5/9 5/9 5/9 5/9 5/9 LU Stndrd Rducd 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) 6/12 (3) HU Stndrd Rducd 0/12 0/12 0/12 0/12 5/15 5/15 5/ /18 5/18 5/18 5/18 MT Stndrd Rducd /7 5/7 NL Stndrd Rducd AT Stndrd Rducd PL Stndrd Rducd 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 7 (3) 5/8 5/8 PT Stndrd Rducd 5/12 5/12 5/12 5/12 5/12 5/12 5/12 5/12 5/12 5/12 6/13 6/13 6/13 RO Stndrd Rducd /9 5/9 5/9 5/9 SI Stndrd Rducd SK Stndrd Rducd / FI Stndrd Rducd 8/17 8/17 8/17 8/17 8/17 8/17 8/17 8/17 8/17 8/17 9/13 9/13 9/13 SE Stndrd Rducd 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 6/12 UK Stndrd Rducd EU-27 Stndrd Not: If two VAT rts wr pplicbl during yr th on bing in forc for mor thn six months or introducd on 1 July is indictd in th tbl. Supr rducd rts (blow 5 %) r shown in brckts. IT: Stndrd rt ws incrsd in Sptmbr 2011; CY: Stndrd rt ws incrsd in Mrch 2012; FI: Rducd 17 % rt ws dcrsd to 12 % on Stndrd rt s wll s rducd rts wr incrsd by on prcntg point on Sourc: Commission srvics 28 Txtion trnds in th Europn Union

31 Ovrll tx rvnu Prt I Tbl 1.2: Implicit tx rt on lbour in th Union , in % Diffrnc BE BG CZ DK DE EE IE EL : : : : : : -3.2 ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO IS : : : : : : : : : : : : : : : : : : EU EA Sourc: Commission srvics O v r l l t x r v n u Grph 1.9: Dvlopmnt of vrg stndrd VAT rt, EU % Rvnu dt stop in 2010 dition of this rport ( 12 ), rvnu rising msurs sinc 2009 wr hvily concntrtd on consumption txs. Excpt for th Nordic countris, mny of th Mmbr Stts pplying bov vrg VAT rts in 2012 r thos xprincing finncil difficultis nd strong prssur for consolidtion nds. 20.5% 20.0% 19.5% 19.0% Sourc: Commission srvics Avrg stndrd VAT rt Hiks in VAT rts continud, lthough t lowr pc, lso in 2011 nd Out of th four countris tht risd th stndrd rt in 2012 only on, Cyprus, ws pplying blow vrg rt bfor th hik only 15 %. At th othr xtrm, Hungry, whr 25 % rt ws lrdy in forc sinc 2008, incrsd it furthr by two points in As discussd in th 2011 Only hlf of thorticl VAT rvnus r collctd An indictor which givs n id of th brodnss of th tx bs nd th lvl of tx complinc is th VAT rvnu rtio. It comprs th ctul VAT rvnu with th thorticl on, which would ris if th stndrd VAT rt wr pplid to totl finl consumption. Th indictor shows tht in 2010 xmptions, rducd VAT rts nd vsion rsultd in only round 50 % of th thorticl VAT rvnus bing collctd. Th sitution vris from country to country with th VAT rvnu rtio s low s 36 % in Grc nd s high s 92 % collctd in Luxmbourg. Hlf of th Mmbr Stts collct lss thn 50 % of th thorticl mounts. Anothr nin countris collct btwn 50 nd 60 % ( 12 ) S Europn Commission (2011c) Txtion trnds in th Europn Union 29

32 Prt I Ovrll tx rvnu O v r l l t x r v n u nd only for fiv countris - Slovni, Bulgri, Estoni, Cyprus nd Luxmburg - th VAT rvnu rtio ws bov 60 % nd for th lttr two it ws 79 % nd 92 % rspctivly. Grph 1.10: VAT rvnu rtio, 2010, in % 100% 80% 60% 40% 20% 0% LU CY EE BG SI AT SE DK MT NL DE CZ HU FI LT PL IE BE FR PT SK UK RO LV ES IT EL Sourc: Commission srvics Txtion of lbour Th tx burdn on lbour incrsd in 2010, rvrsing th rlir trnd Dspit wid consnsus on th dsirbility of lowr txs on lbour, th high lvls of th ITR on lbour ( 13 ) confirm th widsprd difficulty in chiving this im. Although th rtio is off th pks rchd round th turn of th cntury, its downwrd trnd ssntilly cm to hlt s svrl countris witnssd incrss in th lst yr of obsrvtion (s Grph 1.11). Unlik for th ITR on consumption, th crisis did not induc ny visibl rduction of th ITR on lbour in 2008, possibly bcus of th tndncy for lbour mrkts to lg bhind cyclicl dvlopmnts. Th EU- 25 vrg rmind lmost constnt nd th uro r vn rcordd n incrs in th ITR on lbour, so tht th mrginl (0.3 prcntg points) dclin in th djustd EU-27 vrg ws minly du to rductions in Romni nd Bulgri (s Tbl 1.2). Th ffct of th globl conomic crisis ws visibl in 2009 s th ITR dclind mor mrkdly by 0.6 points. Howvr, in 2010 th trnd ws rvrsd nd in mor thn hlf of th Mmbr Stts th tx burdn on lbour strtd incrsing, lthough rmining blow its pr-crisis lvls. Th growth could hv bn vn highr if thr hv not bn lrg drops in svrl nw Mmbr Stts lik Bulgri, Romni nd Hungry. Grph 1.11: Implicit tx rt on Lbour , in % (rithmtic vrgs - djustd for missing dt) EU-27 EA-17 Sourc: Commission srvics Divrs lvl nd pc of chng cross th EU Sinc th bginning of th dcd th NMS-12 Mmbr Stts show, in gnrl, much strongr dclin thn th EU-15 countris: th vrg in ths Mmbr Stts hs gon down by bout 3.6 prcntg points sinc 2000, whil th EU-27 vrg dcrsd by only 2.3 points. Mp 1.2: Tx burdn on lbour, 2010 ( 13 ) Th ITR on lbour is clcultd s th rtio of txs nd socil scurity contributions on mployd lbour incom to totl compnstion of mploys nd pyroll txs. 30 Txtion trnds in th Europn Union

33 Ovrll tx rvnu Prt I Looking t country-by-country brkdown, th highst rductions in th ITR on lbour sinc 2000 hv tkn plc in Bulgri nd Lithuni (ll bov 8 prcntg points), s wll s in Dnmrk, Ltvi, Romni, Slovki, Finlnd, Swdn nd th Unitd Kingdom; it is quit intrsting to not tht ll thr Nordic Mmbr Stts, which r chrctrisd by high ovrll tx rtio, hv strivn forcfully to bring th tx burdn on lbour closr to th EU vrg in rcnt yrs. On th othr hnd, th ITR incrsd mrkdly in Cyprus nd Spin but it rmind blow th Union vrg. In ll th othr Mmbr Stts th chng mountd to lss thn 2.5 prcntg points. Th lowst ovrll ITR on lbour in 2010 is found in Mlt, Portugl nd Bulgri, whil th highst is rcordd in Itly (t 42.6 %) followd by Blgium (42.5 %). It should lso b notd tht dspit th gnrlly lowr lvl of ovrll txtion in th nw Mmbr Stts, this dos not lwys pply to lbour txtion s highlightd for xmpl by Hungry (fifth highst ITR on lbour); th Czch Rpublic, too, hs n bov-vrg ITR. NMS-12 hv in gnrl blow vrg top PIT rts Th tx burdn on lbour is ssntilly composd of prsonl incom txs nd socil scurity contributions. Currntly, th top prsonl incom tx (PIT) rt ( 14 ) mounts to 38.1 %, on vrg, in th EU. This rt vris vry substntilly within th Union, rnging from minimum of 10 % in Bulgri to mximum of 56.6 % in Swdn, s Dnmrk, which lvid th highst PIT mximum rt until 2009, hs cut it to 55.4 % (s Mp1.3). As rul th NMS-12 Mmbr Stts, with th xcption of Slovni nd Cyprus, disply blowvrg top rts, whil th highst rts r typicl of Mmbr Stts with th most lvtd ovrll tx rtios, such s th Nordic countris ( 15 ). Th lowst rts r obsrvd in Bulgri, th Czch Rpublic, Lithuni nd Romni. In ll of thm but th Czch Rpublic th ovrll tx rtio (xcluding SSCs) is mong th lowst in th Union (s Tbl 3 in Annx A). Mp 1.3: Distribution of PIT rts, 2012 Trnd for highr top PIT rts in th ftrmth of th crisis Thr hs bn brod trnd to incrs top PIT rts sinc Evry yr fiv to six Mmbr Stts wr rising th rts nd s consqunc th EU vrg rchd in 2012 its highst lvl sinc 2008, 38.1 % (s Grph 1.12). O v r l l t x r v n u ( 14 ) Th top sttutory prsonl incom tx rt rflcts th tx rt for th highst incom brckt. Th rts lso includ surchrgs, stt nd locl txs. Adjustmnts hv bn crrid for Blgium, Dnmrk, Grmny, Grc, Spin, Cyprus, Frnc, Hungry, Itly, Luxmbourg, Portugl, Romni, Finlnd, Swdn, th Unitd Kingdom nd Norwy. For dtils th intrstd rdr cn find complt dscription of th rt systm nd th brckts in forc in th Mmbr Stts in th 'Txs in Europ' dtbs on th EU wbsit t th following url: Th dtbs is ccssibl fr of chrg nd updtd nnully. ( 15 ) Although th Nthrlnds show th fourth highst top prsonl incom rt whil rnking 13 th in trms of th tx rtio (xcluding socil scurity contributions). PIT tx rts in th Nthrlnds r vry progrssiv but thir progrssivity is limitd whn socil contributions r tkn into ccount. Txtion trnds in th Europn Union 31

34 Prt I Ovrll tx rvnu O v r l l t x r v n u Grph 1.12: Dvlopmnt of top prsonl incom tx rt , in % 52% 50% 48% 46% 44% 42% 40% 38% 36% EU-27 Sourc: Commission srvics EA-17 PIT ccounts for only on third of lbour txs Of cours, th pictur givn by th PIT rts is incomplt. Not only th lvl nd chng of th top PIT rt is rlvnt, but lso th incom lvl t which thy r pplid. Morovr, th progrssion of PIT rts pplid, th structur of llowncs nd tx crdits, nd th dfinition of th tx bs ply ky rol in dfining th ffctiv tx burdn. This is vry ptly illustrtd by th fct tht th ITR on lbour dclind only mrginlly in th priod, dspit th strong rduction in th top PIT rts. Grph 1.13: Composition of th implicit tx rt on lbour 2010, in % 50% Btwn 2000 nd 2010 th componnts of th ITR on lbour chngd mrkdly in svrl Mmbr Stts (s Grph 1.14). Prsonl incom txtion of lbour s wll s mployrs' SSC nd pyroll txs wnt down mrkdly, whil mploys' SSC only slightly dcrsd (ll s prcntg of totl lbour costs). For th uro r th dclins wr considrbly smllr on vrg, nd minly consistd of rduction in prsonl incom txtion. Looking t chngs in singl Mmbr Stts, most of th countris rducd thir ITR; th chng ws to lrg xtnt drivn by rductions in PIT or mployrs' SSC. In mny countris on notics shift in th diffrnt componnts of th tx burdn. Grph 1.14: Evolution of th composition of th implicit tx rt on lbour , diffrncs in prcntg points 10% 5% 0% -5% -10% -15% Prsonl incom tx Employs' SSC Employrs' SSC nd pyroll txs ITR on lbour Not: Countris r ordrd by th chng in th ITR on lbour Sourc: Commission srvics CY ES LU NL PT IT AT MT UK EE FR BE DE HU CZ IE SI EL PL LV SK FI DK RO SE LT BG EU- 27 EA % 40% 35% 30% 25% 20% 15% 10% 5% 0% Sourc: Commission srvics Prsonl incom tx Employs' SSC Employrs' SSC nd pyroll txs In most Mmbr Stts, socil scurity contributions ccount for much grtr shr of lbour txs thn th prsonl incom tx. On vrg, bout two thirds of th ovrll ITR on lbour consists of non-wg lbour costs pid by both mploys nd mployrs (s Grph 1.13). Only in Dnmrk, Irlnd nd th Unitd Kingdom do prsonl incom txs form rltivly lrg prt of th totl chrgs pid on lbour incom, whil in countris lik Polnd, Grc or Slovki lss thn 20 % of th ITR on lbour consists of th prsonl incom tx. IT BE FR AT HU FI CZ SE DE EE NL SI DK ES LV SK LU LT EL PL RO CY IE UK BG PT MT EU- 27 EA- 17 This incrs cn b plusibly ttributd to th ffct of th conomic nd finncil crisis s until 2009, thr hd bn clr, stdy nd widsprd downwrd trnd in th top rt. Indd, from 1995 to 2009, lmost ll EU Mmbr Stts cut thir top rt, with only thr kping it unchngd (Mlt, Austri nd th Unitd Kingdom) nd on (Portugl) incrsing it slightly. Evn tking into ccount th subsqunt rt incrs in 2010, ll in ll, th EU-27 vrg hs gon down by 9.3 prcntg points sinc 1995, cclrting ftr 2000 (s Tbl 1.3). Th fll ws most noticbl in th Cntrl nd Estrn Europn countris, with th biggst cuts tking plc in four countris tht doptd flt rt systms, Bulgri ( 30.0 prcntg points), th Czch Rpublic ( 17.0), Romni ( 24.0) nd Slovki ( 23.0); th cclrtion ftr 2000 ws, howvr, visibl lso in th EU-15 Mmbr Stts. 32 Txtion trnds in th Europn Union

35 Ovrll tx rvnu Prt I Tbl 1.3: Top prsonl incom tx rts incom, in % Diffrnc BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO IS EU EA *) Figurs in itlics rprsnt flt-rt tx O v r l l t x r v n u Not: BE: including crisis tx ( ) nd locl surchrg, CY: including tmporry (2y) solidrity lvl t 3.5% t most, DE: including solidrity surchrg, DK: including lbour mrkt contributions but xcl. church tx; EL: for th rt includs th solidrity contribution introducd in 2011 t top rt of 4 % pplicbl on nt nnul incom xcding EUR 100,000; ES: including tmporry ( ) supplmntry surchrg, FI: stt txs plus municiplity txs, FR: including gnrl socil wlfr contribution nd wlfr dbt rpymnt lvy (sinc 1996), which r prtly dductibl from PIT, HU: including solidrity tx in 2007, 2008 nd In 2012, 27 % bs incrsing componnt is pplicbl for th prt of monthly rnings bov HUF ( 653), roughly th vrg wg, lding to two rt systm with rts 16 % nd 20.3 %, IT: including rgionl nd municipl surchrg (vlus givn for Rom) nd 3% solidrity contribution, LU: including solidrity surchrg for Unmploymnt Fund (sinc 2002) nd crisis contribution for 2011, PT: in 2010 nw top incom rt nd nw rt tbl pplicbl for whol 2010 ws introducd; in 2011 nw surchrg of 3.5 % is lvid on ll ggrgtd ctgoris of incom, in 2012 nd % surchrg is pplid to th highst incom brckt. RO: In 2010, th Snt's Budgt Committ pprovd th dcrs of individul incom tx rt from 16% to 10%. In ordr for th provision to ntr into forc, it hs to b furthr pprovd by th Snt nd by th Chmbr of Dputis, SE: stt txs plus municiplity txs, UK: dditionl highr rt of 50% introducd for incom xcding GBP 150,000 from fiscl yr ; th top PIT rt of 50 % will b cut to 45 % s of 2013, NO: including surtx. Sourc: Commission srvics Txtion trnds in th Europn Union 33

36 Prt I Ovrll tx rvnu O v r l l t x r v n u Tbl 1.4: Tx wdgs for singl xmpl workr t two-thirds of vrg rnings , in % Diffrnc BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO IS EU EA Not: DE, LV, LT, AT, RO nd SI: dt rfr to 2008, CY dt rfr to 2007 Sourc: Commission srvics Cut in tx wdg sinc 2000 Th discussion in th prcding sction is bsd on th ITR on lbour, which giv pictur of th vrg tx burdn on lbour cross ll incom clsss. Howvr, vn t n unchngd ovrll tx lvl, th burdn of txtion my b shiftd btwn high nd low-incom txpyrs rsulting not only in rdistribution but notbly lso in diffrnt impct on mploymnt. In prticulr, ovr th lst dcd policymkrs hv oftn rsortd to cuts in lbour txs tht r trgtd to th bottom nd of th wg scl in ordr to boost mploybility of low-skilld workrs. To vlut progrss in this dirction, this sction looks t th volution of th tx wdg i.. th diffrnc btwn lbour costs to th mployr nd th corrsponding nt tk-hom py of th mploy. Tbl 1.4 focuss on th 'Tx wdg on low wg workrs', which is th tx wdg for singl workr without childrn t two-thirds of vrg rnings nd its dvlopmnts sinc 2000( 16 ). Th figurs disply long nd stdy downwrd trnd indicting clr impct from trgtd cuts in txs nd socil scurity contributions mor intnsivly t th bginning nd towrds th nd of th dcd. Whil th tx wdg is lowr in 21 Mmbr Stts in 2010 comprd to 2000, th rductions ppr to b prticulrly lrg in Swdn, th Nthrlnds, Hungry, Finlnd, Slovki nd Bulgri. Among th countris tht hv incrsd th tx wdg in this priod, Spin shows th biggst incrs with 1.6 prcntg points. Trgtd msurs t low-wg rnrs during th crisis Grph 1.15 comprs th trnds ovr tim in th tx wdg indictor nd th ITR on lbour (with 1996 = 100). For ch yr EU-27 rithmtic vrgs ( 16 ) Pr-2000 dt r not fully comprbl du to chngs in th dfinition of th vrg wg (s OECD, 2006, nd Europn Commission, 2007). 34 Txtion trnds in th Europn Union

37 Ovrll tx rvnu Prt I r computd ( 17 ). Whn compring th trnds it should b born in mind tht tx policy chngs r immditly intgrtd in th Txing Wgs modl but might b rflctd with som tim lg only in th ITR on lbour. Ovrll during th priod, th EU vrg tx burdn on lbour ws on downwrd trnd. This trnd is visibl in th dvlopmnt of both indictors. Howvr, th indictors do not lwys dvlop in prlll. Up to 2000 th ITR on lbour incrsd, whrs th tx wdg strtd to dcrs mrkdly lrdy s of Th gp btwn th two indictors opnd up indicting tht trgtd tx cuts wr plying growing rol. In th scond priod, from , th two sris run roughly prlll, both showing downwrd trnd. Howvr, th gp ovrll incrsd in 2006 nd shows th sm tndncy for Whil th ITR on lbour pickd up ftr svrl yrs of dclin, th tx wdg continud its dcrsing trnd ( 18 ). A rson for this could b th trgtd msurs nctd ftr th outbrk of th conomic crisis to llvit its ffcts on th low-wg rnrs. Grph 1.15: Evolution of micro nd mcro indictors of tx burdn on lbour EU-27, , indx 1996= O v r l l t x r v n u Implicit tx rt on lbour Tx wdg - nw dfinition Tx wdg - old dfinition Sourc: Commission srvics nd Eurostt (tsim050) ( 17 ) As discussd in th 2007 dition of th rport (Europn Commission, 2007), dt for th priod r bsd on diffrnt dfinition of vrg wgs. Thrfor, th tim sris for th tx wdg contins structurl brk in In ordr to clcult sris without brk, th growth rts of th EU-27 vrg of th indictor r usd for th clcultion of th tim trnd of th tx wdg. Th growth rt for th yrs 1997 to 2000 r clcultd bsd on th dt using th old dfinition (wg of th vrg production workr). Growth rts for 2001 onwrd rfr to th nw vrg wg dfinition. ( 18 ) Th EA-17 vrg incrsd slightly by 0.2 prcntg points Txtion trnds in th Europn Union 35

38 Prt I Ovrll tx rvnu O v r l l t x r v n u Tbl 1.5: Adjustd top sttutory tx rt on corport incom , in % Diffrnc BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK IS NO EU EA Not: Only th bsic (non-trgtd) top rt is prsntd hr. Existing surchrgs nd vrgs of locl txs r includd. Som countris lso pply smll profits rts or spcil rts,.g., in cs th invstmnt is finncd through issuing nw quity, or ltrntiv rts for diffrnt sctors. Such trgtd tx rts cn b substntilly lowr thn th ffctiv top rt. -Blgium: ) A 3 % crisis surchrg is pplicbl sinc 1993; b) sinc 1/1/2006 Blgium, pplis systm of notionl intrst (ACE) which rducs th ffctiv tx rt by svrl prcntg points, dpnding on th diffrnc btwn th rt of rturn nd th rt of th notionl intrst dduction. -Cyprus: In 2003 nd 2004 th rt includs th dditionl 5 % surchrg on compnis with incom xcding 1.7 million. -Estoni: As from 2000 th rt for Estoni rfrs only to th gross mount of distributd profits; th tx rt on rtind rnings is zro. -Frnc: Frnc pplis stndrd CIT rt of 33.3 %. Lrg compnis (turnovr ovr nd txbl profit ovr ) r subjct to n dditionl surchrg of 3.3 % lvid on th prt of ggrgt corport tx which xcds For fiscl yrs 2012 nd 2013, n dditionl 5% surchrg on gross incom xcding EUR 250 million is lvid. An nnul minimum lump-sum tx (IFA) bsd on turnovr is pybl whn turnovr is mor thn 15 million. -Grmny: Th rt includs th solidrity surchrg of 5.5 % nd th vrg rt for th trd tx ('Gwrbstur'). From 1995 to 2000 th rts for Grmny rfr only to rtind profits. For distributd profits lowr rts pplid. Until 2007 th trd tx ws n llowbl xpns for th purpos of clculting th incom on which corportion tx is pybl. As from 2008 ntrpriss r subjct to n ovrll tx burdn of 29.8 % nominlly. This is th rsult of th rduction of th corport tx rt from 25 % to 15 % nd th rduction of th bs msur for trd tx from 5 % to 3.5 %. Th djustd top sttutory tx rt is clcultd with n vrg multiplir of 400 % for th trd tx. -Grc: Th rt includs spcil contribution introducd in 2009 (2008 incom) on compnis with nt incom bov 5 million. Th contribution is lvid t progrssiv rts, with th mrginl rt rching 10 %. In 2010 (2009 incom) th contribution pplis to incom bov , top rt bing 10 % (incom bov 5 million). -Hungry: An Innovtion tx of 0.3 % is du on th sm bs s th locl businss tx whil micro nd smll ntrpriss r xmptd from pying. In 2010 th corport incom tx in Hungry consists of two componnts: th stndrd CIT rt of 19 %, locl tx of mximum 2 % tht pplis on th gross oprting profit (turnovr minus costs). Strting from gross oprting profit of 100, compnis would py th locl tx of 2. Th CIT bs is clcultd s th profit bfor tx of 98. A CIT rt of 19 % givs tx of In totl th tx pid is = Itly: As from 1998 th rts for Itly includ IRAP (rt 3.90 %), locl tx lvid on tx bs brodr thn corport incom. Th rt my vry up to 1 prcntg point dpnding on loction. "Robin tx" on finncil institutions is not includd. From 2012, n ACE llownc is in forc, rducing th ffctiv tx rt (s lso prvious not on Blgium). -Irlnd: 25 % for non-trding incom, gins nd profits from mining ptrolum nd lnd dling ctivitis. Until 2003, Irlnd pplid 10 % CIT rt to qulifying mnufcturing nd srvics compnis. -Lithuni: A 'socil tx' (pplid s surchrg) hs bn introducd in 2006 nd 2007 (t 4 % nd 3 % rspctivly). As from 2010, compnis with up to tn mploys nd txbl incom not xcding LTL (pprox. EUR ), bnfit from rducd tx rt of 5 %. -Mlt: Th rt shown dos not tk into ccount th corport tx rfund systm. -Luxmbourg: Bsic locl tx (municipl businss tx) is 3 % to b multiplid by municipl fctor rnging from 2 to 3.5. Th rt in th tbl is for Luxmbourg City. -Portugl: As from 2007 th rt for Portugl includs th mximum 1.5 % rt of municipl surchrg. As from th Stt tx is 3 % on txbl profits btwn EUR 1.5 nd 10 million nd 5 % on profits xcding EUR 10 million. -Unitd Kingdom: As of th 1st Jnury 2012 th rt ws still 26%. From 1st April th rt hs bn rducd to 24% s rsult of Budgt chng (in std of th forsn 25%). Sourc: Commission srvics 36 Txtion trnds in th Europn Union

39 Ovrll tx rvnu Prt I Txtion of cpitl Corport incom tx rts stop dclining Similrly to th trnd rcordd for th PIT, sinc th scond hlf of th 1990s, th djustd top corport incom tx (CIT) rts ( 19 ) in Europ wr cut forcfully sinc th mid-nintis, from 35.3 % vrg to 23.5 % now (s Tbl 1.5). Th crisis, howvr, first slowd down this trnd nd thn stoppd it, s th introduction of sris of surchrgs in svrl countris ld to stbilistion in th EU vrg in 2012 nd vn slight incrs in th uro r Mp 1.4: Distribution of chngs in CIT rts Th djustd sttutory tx rt on corport incom vris btwn minimum of 10 % (in Bulgri nd Cyprus) to mximum of 36.1 % in Frnc, lthough th gp btwn th minimum nd th mximum hs shrunk sinc As in th cs of th prsonl incom tx, th lowst rts r typicl of countris with low ovrll tx rtios; consquntly, th NMS-12 Mmbr Stts gnrlly figur s hving low rts (with th notworthy xcption of Mlt, which is lso th only Mmbr Stt tht hs not chngd its CIT rt sinc 1995). Th rvrs is, howvr, not tru: unlik th cs of th prsonl incom tx, th two Mmbr Stts with th highst tx burdn, Dnmrk nd Swdn, disply corport tx rts tht r not much bov th vrg. This is linkd to th doption by ths countris of Dul Incom Tx systms, which by thir ntur tx cpitl incom t modrt rt. Mp 1.5: Distribution of corport tx rts 2012 O v r l l t x r v n u Lowr CIT rt typicl of NMS-12 Although th downwrd trnd hs bn quit gnrl, corport tx rts still vry substntilly within th Union (s Mp 1.6). ( 19 ) Txtion of corport incom is not only conductd through th CIT, but, in som Mmbr Stts, lso through surchrgs or vn dditionl txs lvid on tx bss tht r similr but oftn not idnticl to th CIT. In ordr to tk ths fturs into ccount, th simpl CIT rt hs bn djustd for comprison purposs: notbly, if svrl rts xist, only th 'bsic' (nontrgtd) top rt is prsntd; xisting surchrgs nd vrgs of locl txs r ddd to th stndrd rt. Adjustmnts hv bn crrid out for Blgium, Grmny, Estoni, Grc, Frnc, Cyprus, Hungry, Irlnd, Itly, Lithuni, Luxmbourg nd Portugl. Cpitl txtion: rvnu hld up wll until 2007 but now st to dcrs undr impct of rcssion nd rt cuts Dspit th sizbl dclin in rts, rvnus from th corport incom tx, th most importnt tx on cpitl incom, hv grown stdily from 2003 to 2007 nd undrwnt mjor rduction sinc thn, dclin of 1 % of GDP in th EU-27 vrg. Th downwrd trnd ws soothd in 2010 with drop of only 0.1 Txtion trnds in th Europn Union 37

40 Prt I Ovrll tx rvnu O v r l l t x r v n u points of GDP. A brodly similr trnd is visibl lso in othr rltd indictors such s rvnu from txs on cpitl nd businss incom txs. Th ITR on cpitl ( 20 ) shows strongr dclin for 2010, 1.1 points in th EU-25 vrg, nd this lvl rmins brodly in lin with th 2002 on (s Grph 1.16). Vrious fctors could xplin this dvlopmnt. First, th ITR on cpitl hs historiclly bn snsitiv to th businss cycl: th EU-25 ITR on cpitl rchd pk btwn 1999 nd 2000, thn dclind, nd pickd up gin, in lin with th businss cycl. Invitbly, th ffcts of th rcssion ffctd th ITR lrdy in 2009 nd Grph 1.16: Implicit tx rt on cpitl , in % (rithmtic vrg - djustd for missing dt Sourc: Commission srvics EU-25 EA-17 In ddition, th strong cuts in th CIT sttutory rt trnslt in lowr rvnus. Howvr, it sms likly tht th msurs to brodn th corport tx bs, which hv frquntly ccompnid th sttutory rt cuts, hv bn plying n importnt rol in sustining th ITRs; nd sris of msurs tkn t EU lvl to limit hrmful tx comptition my too hv hd n impct. Normlly, both fctors fd out with tim: cyclicl ffcts dpnd lrgly on th xistnc of crry-ovr provisions for losss incurrd in prvious yrs nd on cpitl gins, nd bs brodning hs its limits, xplining th dclin in th lst yrs. On impondrbl, howvr, is th possibility, tht, stimultd by th stp fll in corport tx rts, which in som countris r now wll blow th top PIT rt, growing incorportistion hs bn boosting CIT rvnus t th xpns of th prsonl incom tx. Stbilistion in ffctiv tx rts t th currnt nd Effctiv tx rts complmnt sttutory tx rts by dditionl chrgs on invstmnt nd by lmnts of th tx bs in ordr to vlut th ffctiv tx burdn incurrd. Th mthodology usd for th clcultion of EATRs is xplind in ZEW rport by Dvrux t l. (2008) nd follows th mthodology st out by Dvrux nd Griffith (1999, 2003). For th EU-27, th vrg EATR in 2011 is 21.3 %, but this ovrll vrg hids considrbl disprsion in th EATR lvls cross th individul Mmbr Stts (s Tbl 86 in Annx A). Th EATR is th lowst in Bulgri (8.9 %), Cyprus (10.6 %) nd Ltvi (12.6 %), nd th highst in Frnc (32.8 %), Mlt (32.2 %) nd Spin (31.9 %). All NMS-12 Mmbr Stts, xcpt Mlt, hv ffctiv tx rts blow 20 % (16.4 % on vrg); ll EU-15 Mmbr Stts, xcpt th Nthrlnds nd Irlnd, lvy txs t 23 % nd highr (25 % on vrg). Ovr th lst dcd, significnt downwrd trnd in th ffctiv corport tx lvls cn b obsrvd on th EU lvl. Ovr th sm tim priod, th diffrntil in ffctiv tx lvls btwn th EU-15 Mmbr Stts nd th NMS-12 Mmbr Stts incrsd du to intnsifid tx cuts in th ltr ftr EU ccssion. Th fll in EATRs ovr th lst dcd lrgly followd th dcrs of th CIT rt with drop in 2008 mor pronouncd for th formr thn for th lttr probbly du to th numrous tx msurs, othr thn rt cuts supporting th businss tht mny govrnmnts introducd t th outbrk of th crisis ( 21 ). Howvr, th ltst dt show stbilistion. Grph 1.17: Corport Incom Tx rts nd Avrg Effctiv Txtion indictors, EU-27, , in % 36% 34% 32% 30% Tbl 79 in Annx A prsnts th dvlopmnt of th ITR on cpitl for ll th Mmbr Stts nd yrs vilbl, showing brod downwrd trnd similr to tht of th rts. 28% 26% 24% 22% 20% ( 20 ) Th ITR on cpitl is th rtio btwn txs on cpitl nd ggrgt cpitl nd svings incom. Spcificlly it includs txs lvid on th incom rnd from svings nd invstmnts by housholds nd corportions nd txs, rltd to stocks of cpitl stmming from svings nd invstmnt in prvious priods. Th dnomintor of th cpitl ITR is n pproximtion of world-wid cpitl nd businss incom of rsidnts for domstic tx purposs. EU-27 vrg top sttutory CIT rts Sourc: Commission srvics EU-27 EATR - Txtion of th non-finncil sctor ( 21 ) For dtild list of msurs s Europn Commission (2010b) 38 Txtion trnds in th Europn Union

41 Ovrll tx rvnu Prt I Box 1.4: Cpitl tx bs. Th ITR on cpitl is th rtio btwn txs on cpitl nd ggrgt cpitl nd svings incom. Spcificlly it includs txs lvid on th incom rnd from svings nd invstmnts by housholds nd corportions nd txs, rltd to stocks of cpitl stmming from svings nd invstmnt in prvious priods. Th dnomintor of th cpitl ITR is n pproximtion of worldwid cpitl nd businss incom of rsidnts for domstic tx purposs. It compriss of nt oprting surplus, intrsts, insurnc proprty incom ttributd to policy holdrs, rnts on lnd nd dividnds for th sctors non-finncil nd finncil corportions, housholds, slf-mployd, non-profit orgnistions, gnrl govrnmnt nd rst of th world (for dtild mthodologicl discussion s mthodologicl nnx). Th tbl blow prsnts th volution of th dnomintor of th ITR on cpitl in prcntg of GDP for ch Mmbr Stt. This rtio vris for most Mmbr Stts btwn 20 % nd 35 % of GDP. At th low nd, Slovni provids low rtio of only 18.7 % whil t th high nd th rtio of cpitl bs to GDP in Irlnd nd th Nthrlnds is bov 40 %. Tbl: Cpitl tx bs to GDP, , in % BE BG : : : : : : : : : : : : : : : : CZ DK : DE EE : : : : : IE : : : : : : : EL : : : : : : : : : : ES : : : : : : FR IT CY LV LT LU : : : : : : : : : : : : : : : : HU MT : : : : : : : : : : : : : : : : NL AT PL PT RO : : : : : : : : : : : : : : : : SI SK FI SE UK : NO Sourc: Eurostt (ns_nf_tr), own clcultions O v r l l t x r v n u Lrg diffrncs in txtion of cpitl stocks/wlth Th bsolut lvls of th ITRs on cpitl diffr widly within th EU, rnging from 37.2 % in Frnc (39 % in Dnmrk bsd on 2009 dt) to mr 9.1 % in Estoni (s Grph 1.18). A brkdown of th ITR on cpitl shows tht in most css, th ITRs on cpitl nd businss incom clustr round 20 % so th vrition in th tx burdn on cpitl drivs lrgly from wid diffrncs in th txtion of cpitl stocks/wlth. Thir procds r vry limitd in som Mmbr Stts, but contribut significnt mount of rvnu in svrl othrs, dpnding not only on th tx rts but lso on th siz nd profitbility of th cpitl stock. In trms of bsolut lvls, th most striking fturs r th vry high lvls of th ITR on corport incom in Swdn, Itly nd Cyprus nd its vry low lvls in th thr Bltic Mmbr Stts nd Hungry. Grph 1.18: Implicit tx rt on cpitl 2010, in % DK FR UK SE IT CY PT BE ES FI AT SI DE PL EL HU CZ SK IE NL EE LV LT NO Not: no dt for BG, LU, MT, RO nd IS; dt for DK, ES nd UK rfr to 2009 Sourc: Commission srvics As xplind bov, th ITR on cpitl nd businss incom diffrs from th gnrl ITR on cpitl s it xcluds th txs on th stock of cpitl/wlth. It cn b brokn down furthr into corport incom or 44.9 Txtion trnds in th Europn Union 39

42 Prt I Ovrll tx rvnu O v r l l t x r v n u cpitl nd businss incom of housholds nd th slfmployd (in th form of rnts, dividnds, intrst, insurnc incom, tc.)( 22 ). Grph 1.19: Implicit tx rt on cpitl nd businss incom 2010, in % 40% 35% 30% 25% 20% 15% 10% 5% 0% SE IT CY FI UK AT PT DK ES FR SI BE PL EL CZ SK IE NL HU EE LT LV NO ITR Cpitl nd businss incom ITR Corport incom ITR Cpitl nd businss incom of housholds nd slf-mployd Not: no dt for BG, DE, LU, MT, RO nd IS; dt for DK, ES nd UK rfr to 2009; dt for PT (corport incom, houshold nd slf-mployd) rfr to 2008 Sourc: Commission srvics Environmntl txtion Environmntl txtion rgining importnc ltly Environmntl txs (officilly dnotd s "nvironmntlly rltd txs") r dfind s tx whos tx bs is physicl unit (or proxy of physicl unit) of somthing tht hs provn, spcific ngtiv impct on th nvironmnt. Min xmpls of such txs r xcis dutis on nrgy products, txs on trnsport vhicls s wll s pollution txs. Environmntl txtion hs plyd n importnt rol in policy dbts, in th contxt of both currnt nd prvious conomic criss, s it is considrd tht rising nvironmntl txs could crt scop for lbour tx cuts nd thus dlivr doubl dividnd in th sns of boosting mploymnt nd improving th qulity of th nvironmnt t th sm tim. ( 22 ) No dt r vilbl for Bulgri, Luxmbourg, Mlt nd Romni. Dt covrg for Estoni nd Spin strts in 2000, for Irlnd in 2002, for Grc in Dt for 2010 for Dnmrk, Spin nd th Unitd Kingdom rfr to In ddition, th covrg of th lst two ITRs is lowr thn for th ITR on cpitl nd businss incom nd som djustmnts r ncssry. For Austri nd Portugl th ITR on corport incom rprsnts th tx burdn on ll compnis including th slf-mployd. This corrction is ncssry bcus of th sctorl mismtch in th rcording of unincorportd prtnrships in ntionl ccounts. Th profits of prtnrships, trtd s qusi-corportions in ntionl ccounts, r bookd in th corportions sctor whil th corrsponding tx pymnts r rcordd in th housholds sctor, givn tht th ownrs of th prtnrship r txd undr th prsonl incom tx schm. In thory, lso for Grmny, whr prtnrships r n importnt prt of compnis, similr corrction could b clcultd. Howvr, owing to rsrvtions rgrding comprbility with othr Mmbr Stts, it hs bn dcidd not to publish ths rsults. Currntly, roughly on uro out of vry sixtn in rvnu is risd from nvironmntl txs. As prcntg of GDP, nvironmntl tx rvnus dclind slowly during , first in th uro r nd progrssivly pplying lso to th mjority of th Mmbr Stts, rvrsing prvious clr progrssion. Howvr, s of 2009 nvironmntl tx rvnu strtd incrsing gin nd by now thr is prcticlly no diffrnc in rvnu btwn th NMS-12 nd th EU-15 Mmbr Stts. Nvrthlss, highr nrgy intnsity of th conomy in th NMS-12 countris tnds to driv up nvironmntl tx rvnu nd offst lowr xcis rts in rvnu trms. Grph 1.20: Environmntl tx rvnus, , % of GDP 2.9% 2.8% 2.7% 2.6% 2.5% 2.4% 2.3% EU-27 rithmtic vrgs Sourc: Commission srvics EU-27 wightd vrgs Environmntl txtion riss on vrg 3 % of GDP Tbl 1.6 shows th nvironmntl tx-to-gdp rtio by Mmbr Stt. Th vst mjority of Mmbr Stts tnd to fll in bnd rnging from 2 % to 3 % of GDP. Only four Mmbr Stts show lvls blow 2 % of GDP, whil in thr othr countris nvironmntl tx rvnus xcd 3.5 % of GDP. At 4.0 % in 2010, Dnmrk nd th Nthrlnds disply th highst lvl of grn txs followd by Slovni (3.6 %). Th lowst nvironmntl tx rvnus in rltion to GDP r instd found in Spin, Frnc nd Lithuni nd Slovki, ll blow 2 % in Th prdominnc of nrgy txs is common to most Mmbr Stts; howvr, in som countris th contribution of txs on vhicls is significnt: for instnc, in Dnmrk, Irlnd, Cyprus nd Mlt thy ccount for btwn 36 % nd 44 % of nvironmntl txs. In 2010 tx rvnu from ths txs mountd to 0.5 % of GDP in th EU-27, whil txs on pollution/rsourcs risd only 0.1 % of GDP (s Annx A). 40 Txtion trnds in th Europn Union

43 Ovrll tx rvnu Prt I Tbl 1.6: Environmntl tx rvnu in th Union , in % of GDP Diffrnc (% points) BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO IS EU-27 vrgs wightd rithmtic O v r l l t x r v n u EA-17 vrgs wightd rithmtic Sourc: Commission srvics Opposing chngs in th composition of nvironmntl txtion cross th EU Grph 1.21 shows th volution in th structur of nvironmntl txs btwn 2000 nd Th grph highlights tht th modrt dcrs in th EU vrg concls numbr of opposing chngs in composition in som Mmbr Stts. For instnc, th ovrll slight dclin in nrgy txtion should b put in th contxt of mrkd incrss in svrl countris. Ovr th priod th highst incrs in nrgy txtion took plc in Estoni, ovr 1 % of GDP, whil othr countris with non-ngligibl incrss wr Cyprus, Slovni, Slovki, Portugl nd Polnd. On th othr hnd, thr hs bn strong dcrs of nrgy txs in Romni mounting to lmost 1.5 % of GDP. On cn lso obsrv tht th lvl of trnsport txs hs dcrsd quit strongly in Cyprus nd Mlt, th two countris whr trnsport txs form n importnt shr of nvironmntl txtion, but th fll is prtly offst by incrss in nrgy txs (Cyprus) or pollution/ rsourcs txs (Mlt). Grph 1.21: Evolution of th structur of nvironmntl txs , diffrnc in % of GDP 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% Enrgy Trnsport Pollution/Rsourcs Totl Not: Wightd vrgs Sourc: Commission srvics EE SI PL BG CY NL EL CZ LV SE AT PT DE BE SK UK FI FR HU LU IE ES LT MT IT DK RO EU- 27 EA- 17 Txtion trnds in th Europn Union 41

44 Prt I Ovrll tx rvnu O v r l l t x r v n u Incrs of th implicit tx rt on nrgy sinc 2009 A high rtio of nvironmntl tx rvnu to totl txtion s such dos not ncssrily rprsnt n indiction of high priority bing ttributd to nvironmntl protction. Enrgy txs nd trnsport hv bn usd purly s rvnu rising instrumnts, originlly without nvironmntl purposs. Furthrmor, tx rvnus r product of tx rt nd tx bs. Hnc th high lvl of th indictor cn rsult not only form th high lvl of tx rts, but lso from high tx bs in rltion to GDP, which is n indiction of th infficint us of rsourcs in country. In this sns th indictor cn giv mislding viw of nvironmntl policy gols of th country in qustion. Th indictor implicit tx rt on nrgy (ITR) is not influncd by th siz of th tx bs nd provids in this sns mor rlibl msur of th ffctiv lvl of nvironmntlly rltd (or nrgy) txtion. Howvr, this indictor lso shows som pculiritis. Th ITR on nrgy trts qully ll kinds of nrgy consumption, rgrdlss of thir nvironmntl impct; n nrgy unit producd from hydrolctric powr hs th sm wight s unit producd from col. In mny countris, howvr, rnwbl nrgy sourcs r subjct to lowr tx rts thn xhustibl nrgy sourcs, or ltogthr xmptd in ordr to provid incntivs to switch from fossil fuls towrds ths mor nvironmntlly-frindly sourcs of nrgy. Thus, prdoxiclly, country with lrg shr of rnwbl nrgy my hv lowr ITR on nrgy thn country tht rlis lrgly on crbon-bsd nrgy sourcs. Dt show tht in rl trms txtion on nrgy hs bn trnding downwrd in th priod nd tht th fll hs bn shrpst towrds th nd of tht priod. Howvr, in 2009, th rl ITR on nrgy t th (GDP-wightd) vrg lvl incrsd shrply nd stood bov its lvls. Concrning individul countris, th rl burdn of txtion on nrgy hs incrsd in 2009 from 2008 lvls in nrly ll EU Mmbr Stts, with th xcption of Luxmburg, Hungry, Bulgri nd Slovki whr it rmind lmost unchngd. Grph 1.22: Enrgy tx rvnus in rltion to finl nrgy consumption (rl ITR on nrgy) Euro pr tonn of oil quivlnt, dfltd with cumultiv % chng in finl dmnd dfltor (2000=100) EU-27 Not: GDP wightd vrg Sourc: Commission srvics EA-17 Lrg shr of nrgy txs lvid on trnsport ful Enrgy txs compris txs on both trnsport fuls nd sttionry ( 23 ) us of nrgy products. Grph 1.23 shows th nrgy tx-to-gdp rtio by Mmbr Stt nd displys which shr is stmming from trnsport ful txs. Th grph highlights tht trnsport fuls prdomint in most countris, with fw xcptions (Slovki, Dnmrk, Swdn, Itly, th Nthrlnds). Enrgy tx rvnu is highst in Slovni, Estoni nd Bulgri (3.1 %, 2.6% nd 2.6 % of GDP rspctivly). This is du, howvr, not to high tx rts s such but to th high lvl of finl nrgy consumption. Grph 1.23: Enrgy tx rvnus by Mmbr Stt 2010, in % of GDP 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% SI EE BG DK SE CZ LU PL HU NL IT LV UK CY DE RO PT LT FI EL SK AT MT IE FR ES BE E U- 27 Trnsport ful tx Not: wightd vrgs Sourc: Commission srvics Othr nrgy tx EA- 17 ( 23 ) Sttionry us mns th us for sttionry businss pplictions (such s industril procsss) nd for hting purposs. 42 Txtion trnds in th Europn Union

45 Ovrll tx rvnu Prt I Importnc of ful txs vris cross Mmbr Stts Th shr of ful txs diffrs lot cross th EU, from bov 90 % in Ltvi, Lithuni, Bulgri nd Luxmbourg to only bout 50 % in Dnmrk nd Swdn. Mp 1.6: Distribution of xcis duty of gs oil, Jn 2012 O v r l l t x r v n u Th prdominnc of trnsport ful txs is striking in th NMS-12 s most of thm pply th minimum xcis duty, or t lst rts clos to th minimum, for txing nrgy products such s lctricity, nturl gs nd col. Th rvnus collctd from txing ths products r thrfor low comprd with thos ccruing from trnsport ful. As for th EU-15 Mmbr Stts th pictur is vry diffrnt s thr r significnt diffrncs in th xcis duty rts on nturl gs nd lctricity (som pply th EU rquird minimum rt nd othrs 200 tims th minimum). Txtion trnds in th Europn Union 43