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Irish Tax-to-GDP Ratio

Wednesday, 08 May 2013   (0 Comments)
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Source: (Ireland)

Tax revenue as a percentage of GDP in the EU averaged 38.8% in 2011 according to the latest Eurostat statistics.  This represents the sum of taxes and social contributions as a percentage of GDP.  The tax burden in 2011 varies significantly between Member States, ranging from less than 30% (lowest in Lithuania at 26.0%) to more than 40% (highest in Denmark at 47.7%).  Ireland is placed sixth lowest at 28.9%.  It doesn't feel like it though, does it? 

Between 2010 and 2011, the largest increases in tax-to-GDP ratios were recorded in Portugal (from 31.5% to 33.2%), Romania (from 26.7% to 28.2%) and France (from 42.5% to 43.9%).  The Eurostat study also shows that the largest source of tax revenue in the EU is labour taxes, representing nearly half of total tax receipts, followed by consumption taxes at roughly one third and taxes on capital at around one fifth.

More up-to-date figures are offered for actual tax rates.  The average top personal income tax rate in the EU is 38.7% in 2013, up from 38.1% in 2012, but well below the level of 2000 at 44.8%. The highest top rates on 2013 personal income are observed in Sweden (56.6%), Denmark (55.6%), Belgium (53.7%), Portugal (53.0%), Spain and the Netherlands (both 52.0%), and the lowest in Bulgaria (10.0%), Lithuania (15.0%), Hungary and Romania (both 16.0%). 

The average top corporate tax rate in the EU is 23.0% in 2013 with the highest statutory tax rate on corporate income recorded in France (36.1%), Malta (35.0%) and Belgium (34.0%), and the lowest in Bulgaria and Cyprus (both 10.0%) and Ireland (12.5%).

The average standard VAT rate in the EU is 21.3% in 2013, slightly up compared with 2012. In 2013 compared with 2012, six Member States increased their VAT rate, and only Latvia reduced it. 

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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