Comparing Europe’s Tax Systems: Corporate Taxes
According to the corporate tax component of the 2021 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.
3 min readAccording to the corporate tax component of the 2021 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.
3 min readIn the past three years, eight European OECD countries changed their top personal income tax rate, of which four of them cut their top personal income tax rates.
3 min readTax competition has proven to be key in keeping tax hikes under control in some regions of Spain as regional governments look to copy Madrid’s tax reforms.
6 min readRather than pursuing policies that have demonstrably reduced R&D and innovation elsewhere, and that would disincentivize R&D in the U.S., lawmakers should continue to ensure an ecosystem that encourages risk-taking and R&D.
4 min readPatent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP. Most commonly, eligible types of IP are patents and software copyrights. Currently, 14 of the 27 EU member states have a patent box regime.
4 min readIreland and France levy the highest excise duties on cigarettes in the EU, at €8.42 ($9.60) and €6.61 ($7.53) per 20-cigarette pack, respectively. This compares to an EU average of €3.34 ($3.80). Bulgaria (€1.81 or $2.06) and Poland (€2.08 or $2.37) levy the lowest excise duties.
3 min readThe highest excise duties are applied in Finland, Sweden, and Ireland, where the rates for a standard-size bottle of liquor are €14.10 ($16.08), €13.80 ($15.73), and €11.92 ($13.59), respectively.
3 min readAs one might expect, southern European countries that are well-known for their wines—such as France, Greece, Portugal, and Spain—either don’t tax it or do so at a very low rate. But travel north and you’ll see countries that tend to levy taxes on wine—and often hefty taxes.
3 min readFinland has the highest excise tax on beer in Europe, followed by Ireland and the United Kingdom. Compare beer taxes in Europe this International Beer Day
3 min read19 European OECD countries employ a fully territorial tax system, exempting all foreign-sourced dividend and capital gains income from domestic taxation. No European OECD country operates a worldwide tax system.
3 min readTo discourage this form of international debt shifting, many countries have implemented so-called thin-capitalization rules (thin-cap rules), which limit the amount of interest a multinational business can deduct for tax purposes.
5 min readTo prevent businesses from minimizing their tax liability by taking advantage of cross-country differences, countries have implemented various anti-tax avoidance measures, such as the so-called Controlled Foreign Corporation (CFC) rules.
5 min readTo reduce tax compliance and administrative costs, most countries have VAT exemption thresholds: If a business is below a certain annual revenue threshold, it is not required to participate in the VAT system.
2 min readMany companies have investment projects with different risk profiles and operate in industries that fluctuate greatly with the business cycle. Carryover provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
7 min readAs economic activity resumes and the task of accounting for the deficits incurred in navigating the crisis of the past year becomes the focus of fiscal policy deliberations, a greater reliance on VAT could be an important tool in ensuring fiscal stability going forward. Countries should use this as an opportunity to improve VAT systems by re-examining carveouts in the form of exemptions and reduced rates.
2 min readCorporate income taxes are commonly levied as a flat rate on business profits. However, some countries provide reduced corporate income tax rates for small businesses. Out of 27 European OECD countries covered in today’s map, eight levy a reduced corporate tax rate on businesses that have revenues or profits below a certain threshold.
3 min readIn recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems (ETS), and carbon taxes.
3 min readMost countries provide tax relief to families with children—typically through targeted tax breaks that lower income taxes. While all European OECD countries provide tax relief for families, its extent varies substantially across countries.
2 min read