A. Kristina Zvinys is a 2020 summer intern with the Tax Foundation’s Center for Global Tax Policy.
Over the last three years, eight European OECD countries have made changes to their dividend tax rates. Iceland, Norway, Slovenia, Switzerland, and Turkey increased their rates, each between roughly one and three percentage points. France, Greece, and Latvia cut their rates by 10 percentage points.
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Ten European OECD countries recently changed their top personal income tax rates. Of the ten countries, six cut their top personal income tax rates while the other four raised their top rates.
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Sweden’s 2021 budget outlines an aggressive plan to both cut income taxes in a permanent manner alongside multiple other tax cuts and spending increases
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Just as COVID-19 is putting pressure on other sources of revenue, the loss of VAT revenues resulting from the crisis will force governments to evaluate their VAT systems.
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Over the last two decades, corporate income tax rates have declined around the world. Our new map shows the most recent changes in corporate tax rates in European OECD countries, comparing how combined statutory corporate income tax rates have changed between 2017 and 2020.
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Tax treaties usually provide mechanisms to eliminate double taxation and can provide certainty and stability for taxpayers and encourage foreign investment and trade. A broad network of tax treaties contributes to the competitiveness of an economy.
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To discourage a certain 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.
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To prevent businesses from minimizing their tax liability by taking advantage of cross-country differences in taxation, countries have implemented various anti-tax avoidance measures, one known as Controlled Foreign Corporation (CFC) rules.
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The method by which a country allows businesses to account for inventories can significantly impact a business’s taxable income. When prices are rising, as is usually the case due to factors like inflation, LIFO is the preferred method because it allows inventory costs to be closer to true costs at the time of sale.
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Individuals respond to taxes by changing their behavior. Hence, when there are tax differences between countries, some might respond by moving to a lower-tax area. For higher-income individuals, the benefits of moving as a result of higher taxes are greater because they have more income or wealth at stake.
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High property taxes levied not only on land but also on buildings and structures can discourage investment because they disincentivise investing in infrastructure, which businesses would have to pay additional tax on. For this reason, it may also influence business location decisions away from places with high property tax.
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Ireland and the United Kingdom levy the highest excise duties on cigarettes in the European Union (EU), at €8.00 ($8.95) and €6.83 ($7.64) per 20-cigarette pack, respectively. This compares to an EU average of €3.22 ($3.61). Bulgaria (€1.80 or $2.01) and Slovakia (€2.07 or $2.32) levy the lowest excise duties.
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Hungary is the only EU state to have actually implemented COVID-19 tax hikes.
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While it is important that Peru find ways to offset its deficit spending, a temporary wealth tax may introduce more problems than it solves.
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