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VAT Bases in Europe
As 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 read
Reduced Corporate Income Tax Rates for Small Businesses in Europe
Corporate 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 read
Carbon Taxes in Europe
In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems (ETS), and carbon taxes.
2 min read
Tax Relief for Families in Europe
Most 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
Dividend Tax Rates in Europe, 2021
2 min read
Top Personal Income Tax Rates in Europe, 2021
Most countries’ personal income taxes have a progressive structure, meaning that the tax rate paid by individuals increases as they earn higher wages. The highest tax rate individuals pay differs significantly across Europe, with Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) having the highest top statutory personal income tax rates among European OECD countries.
3 min read
Estate, Inheritance, and Gift Taxes in Europe, 2021
Estate tax is levied on the property of the deceased and is paid by the estate itself. Inheritance taxes, in contrast, are only levied on the value of assets transferred and are paid by the heirs. Gift taxes are levied when property is transferred by a living individual. The majority of European countries covered in today’s map currently levy estate, inheritance, or gift taxes.
3 min read
Capital Gains Tax Rates in Europe, 2021
4 min read
Inventory Valuation in Europe
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.
2 min read
Corporate Income Tax Rates in Europe, 2021
On average, European OECD countries currently levy a corporate income tax rate of 21.7 percent. This is below the worldwide average which, measured across 177 jurisdictions, was 23.9 percent in 2020.
2 min read
Marginal Effective Tax Rates and the 2021 UK Budget
The 2021 UK budget introduces a two-year super-deduction of 130 percent for plant and equipment and a delayed corporate tax rate increase from 19 percent to 25 percent in 2023. These policies have differential impacts on marginal effective tax rates for different assets, implying investment incentives will not be uniform.
15 min read
Bank Taxes in Europe
Today’s map shows which European OECD countries implemented financial stability contributions (FSCs), commonly referred to as “bank taxes.”
2 min read
Reliance on Property Taxes in Europe
Property taxes are levied on the assets of an individual or business. There are different types of property taxes, with recurrent taxes on immovable property (such as property taxes on land and buildings) the only ones levied by all countries covered. Other types of property taxes include estate, inheritance, and gift taxes, net wealth taxes, and taxes on financial and capital transactions.
1 min read
Reliance on Consumption Taxes in Europe
Hungary relies the most on consumption tax revenue, at 45.3 percent of total tax revenue, followed by Latvia and Estonia at 45.1 percent and 42.4 percent, respectively.
2 min read
Reliance on Social Insurance Tax Revenue in Europe
Social insurance taxes are the second largest tax revenue source in European OECD countries, at an average of 29.5 percent of total tax revenue.
2 min read
Reliance on Individual Income Tax Revenue in Europe
Denmark relies the most on revenue from individual income taxes, at 52.4 percent of total tax revenue, followed by Iceland and Ireland at 40.8 percent and 31.5 percent, respectively.
1 min read
Reliance on Corporate Income Tax Revenue in Europe
Despite declining corporate income tax rates over the last 30 years in Europe (and other parts of the world), average revenue from corporate income taxes as a share of total tax revenue has not changed significantly compared to 1990.
1 min read
The European Commission and the Taxation of the Digital Economy
The consultation on the EU’s digital levy provides an opportunity for policymakers and taxpayers to reflect on the underlying issues of digital taxation and potential consequences from a digital levy. Unless the EU digital levy is designed with an OECD agreement in mind, it is likely to cause more uncertainty in cross-border tax policy.
12 min read
Financial Transaction Taxes in Europe
Belgium, Finland, France, Ireland, Italy, Poland, Spain, Switzerland, Turkey, and the United Kingdom currently levy a type of financial transaction tax
2 min read
Actionable VAT Policy Gap in Europe
Value-added taxes (VAT) make up approximately one-fifth of total tax revenues in Europe. However, European countries differ significantly in how efficiently they raise VAT revenues. One way to measure a country’s VAT efficiency is the VAT Gap.
3 min read