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As a nonpartisan, educational organization, the Tax Foundation has earned a reputation for independence and credibility. Our global tax policy team regularly provides accessible, data-driven insights, including a survey of corporate tax rates around the world, from sources such as the Organisation for Economic Co-Operation and Development (OECD), the European Commission, and others.
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A new report shows that corporate tax rates around the world continue to level off. “We aren’t seeing a race to the bottom, we’re seeing a race toward the middle,” said Sean Bray, EU policy analyst at the Tax Foundation.
Governments often justify higher tax burdens with more extensive public services. However, the cost of these services can be more than half of an average worker’s salary.
Designing tax policy in a way that sustainably finances government activities while minimizing distortions is important for supporting a productive economy.
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) have the highest top statutory personal income tax rates among European OECD countries.
To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.
The EU countries with the highest standard VAT rates are Hungary (27 percent), Croatia, Denmark, and Sweden (all at 25 percent). Luxembourg levies the lowest standard VAT rate at 16 percent, followed by Malta (18 percent), Cyprus, Germany, and Romania (all at 19 percent).
As Oktoberfest celebrations kick off around the world, let’s look at how much tax European Union (EU) countries add to the world’s favorite alcoholic beverage.
In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems, and carbon taxes. In 1990, Finland was the world’s first country to introduce a carbon tax.
Carryover tax provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
The aim of patent boxes is generally to encourage and attract local research and development (R&D) and to incentivize businesses to locate IP in the country. However, patent boxes can introduce another level of complexity to a tax system, and some recent research questions whether patent boxes are actually effective in driving innovation.
Capital allowances play an important role in a country’s corporate tax base and can impact investment decisions—with far-reaching economic consequences.
As the EU pursues massive changes in public policy as part of its green transition, expect fuel taxes to be central to any policy discussions.