Part I

Overall tax revenue

Table 1.2: Implicit tax rate on labour in the Union

1995-2010, in %

1997
43.8
34.3
40.4
40.7
39.2
37.6
29.3
:
30.4
41.7
43.1
21.1
36.1
38.4
29.3
42.6
20.7
33.0
40.7
35.9
21.8
31.4
36.9
38.3
43.5
48.4
24.5
37.3
:

1998
44.0
33.5
41.0
38.9
39.2
38.9
28.5
:
30.4
42.1
43.1
22.5
37.2
38.3
28.8
41.8
19.3
33.6
40.3
35.6
21.6
31.7
37.5
38.0
43.8
49.3
25.3
37.3
:

1999
43.4
34.7
41.0
40.2
39.0
39.3
28.7
:
30.1
42.3
42.3
21.8
36.9
38.7
29.6
41.9
20.2
34.5
40.5
35.8
22.0
37.6
37.8
37.4
43.3
48.5
25.6
37.1
:

2000
43.6
38.1
41.2
41.0
39.1
37.8
28.5
34.5
30.5
41.9
41.8
21.6
36.7
41.2
29.9
41.4
21.8
35.0
40.1
33.6
22.3
33.6
37.6
36.3
44.0
46.8
25.9
37.1
:

2001
43.3
33.9
40.8
40.8
38.9
37.3
27.4
34.6
31.4
41.5
41.9
22.9
36.5
40.2
29.6
40.9
22.1
31.4
40.6
33.2
22.8
31.2
37.5
37.1
44.1
45.5
25.7
37.2
:

2002
43.3
33.4
41.3
38.8
38.7
37.8
26.0
34.4
32.1
41.1
41.8
22.3
37.8
38.1
28.4
41.2
22.3
31.5
40.8
32.4
22.8
31.2
37.7
36.7
43.8
43.8
24.7
37.5
:

2003
43.2
35.6
41.7
38.1
38.8
36.9
25.0
34.7
31.6
41.4
41.6
22.8
36.6
36.9
29.2
39.3
21.7
32.0
41.0
32.7
22.9
29.7
37.8
36.1
42.5
43.5
24.8
37.7
:

2004
43.8
35.7
41.5
37.5
37.8
35.8
26.3
33.6
32.0
41.3
41.5
22.7
36.7
36.0
28.9
38.3
21.8
31.9
41.1
32.7
22.3
29.1
37.6
34.5
41.6
43.5
25.5
37.8
:

2005
43.6
33.2
41.3
37.1
37.5
33.8
25.4
33.7
32.3
41.7
41.1
24.4
33.2
34.9
30.0
38.4
22.1
32.3
40.8
33.8
22.4
28.1
37.6
32.9
41.6
43.6
26.2
37.1
:

2006
42.5
29.7
41.1
36.9
37.6
33.6
25.3
33.0
32.9
41.7
40.8
23.9
33.1
33.6
30.4
38.9
21.9
35.1
40.9
35.4
23.1
30.1
37.3
30.5
41.6
42.9
26.5
36.6
:

2007
42.5
30.4
41.7
36.6
37.5
33.9
25.6
33.9
33.7
41.4
42.2
23.9
31.1
33.1
31.1
41.0
20.9
35.6
41.0
34.0
23.7
30.2
35.9
31.1
41.3
41.2
26.8
36.1
:

2008
42.4
27.4
40.0
36.6
38.0
33.7
24.6
32.9
32.7
41.5
42.8
24.6
28.4
32.7
31.6
42.3
20.7
36.8
41.3
32.5
23.5
27.3
35.9
33.2
41.2
41.2
26.9
35.8
:

2009
41.9
25.7
37.6
35.2
37.8
35.1
25.2
29.7
31.7
41.3
42.3
26.2
29.1
32.6
31.6
40.8
20.8
35.9
40.3
30.9
23.4
28.6
35.1
31.4
40.1
39.3
25.7
35.8
:

2010
42.5
24.4
39.0
34.8
37.4
37.0
26.1
31.3
33.0
41.0
42.6
27.0
32.5
31.7
32.0
39.4
21.7
36.9
40.5
30.1
23.4
27.4
35.0
32.0
39.3
39.0
25.7
36.1
:

EU-27
35.3 35.0 35.5
EA-17
34.3 34.3 34.4
Source: Commission services

35.5
34.5

35.8
34.5

35.8
34.5

35.3
34.4

35.0
34.2

34.7
34.1

34.5
33.8

34.2
33.7

34.1
33.7

34.1
33.8

33.8
34.0

33.2
33.5

33.4
34.0

BE
BG
CZ
DK
DE
EE
IE
EL
ES
FR
IT
CY
LV
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
NO
IS

1995
43.6
30.8
41.4
40.2
38.8
38.6
29.7
:
31.0
41.1
37.8
22.1
39.2
34.5
29.3
42.3
20.1
34.8
38.5
36.8
22.3
31.6
38.5
38.5
44.2
46.8
25.9
36.7
:

1996
43.2
31.6
40.2
40.2
38.3
37.8
29.3
:
31.9
41.4
41.5
20.8
34.6
35.0
29.6
42.1
18.8
33.8
39.4
36.3
21.9
29.8
36.7
39.4
45.3
48.0
25.0
37.0
:

Graph 1.9: Development of average standard VAT rate,

EU-27
21.0%

O
v
e
r
a
l
l

Difference
1995-2010 2000-2010
-1.1
-1.1
-6.4
-13.7
-2.4
-2.2
-5.4
-6.2
-1.4
-1.7
-1.5
-0.8
-3.6
-2.4
:
-3.2
2.0
2.5
-0.1
-0.8
4.8
0.8
4.8
5.4
-6.7
-4.2
-2.8
-9.5
2.7
2.1
-3.0
-2.1
1.6
-0.1
2.0
1.9
2.0
0.4
-6.8
-3.5
1.1
1.1
-4.2
-6.2
-3.5
-2.6
-6.4
-4.3
-5.0
-4.8
-7.8
-7.8
-0.2
-0.3
-0.7
-1.0
:
:
-1.9
-0.3

t
a
x
r
e
v
e
n
u
e

-2.3
-0.5

edition of this report (12), revenue raising measures

since 2009 were heavily concentrated on consumption
taxes. Except for the Nordic countries, many of the
Member States applying above average VAT rates in
2012 are those experiencing financial difficulties and
strong pressure for consolidation needs.

Revenue data stop in 2010

20.5%

Only half of theoretical VAT revenues are

collected

20.0%

19.5%

19.0%
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Average standard VAT rate

Source: Commission services

Hikes in VAT rates continued, although at a lower

pace, also in 2011 and 2012. Out of the four countries
that raised the standard rate in 2012 only one, Cyprus,
was applying below average rate before the hike only
15 %. At the other extreme, Hungary, where a 25 %
rate was already in force since 2008, increased it
further by two points in 2012. As discussed in the 2011

An indicator which gives an idea of the broadness of

the tax base and the level of tax compliance is the VAT
revenue ratio. It compares the actual VAT revenue with
the theoretical one, which would arise if the standard
VAT rate were applied to total final consumption.
The indicator shows that in 2010 exemptions, reduced
VAT rates and evasion resulted in only around 50 % of
the theoretical VAT revenues being collected. The
situation varies from country to country with the VAT
revenue ratio as low as 36 % in Greece and as high as
92 % collected in Luxembourg. Half of the Member
States collect less than 50 % of the theoretical amounts.
Another nine countries collect between 50 and 60 %
(12) See European Commission (2011c)

Taxation trends in the European Union

29