Brussels, 29/10/2012 (Agence Europe) - France, Spain, Malta, Germany, Belgium and Greece are the EU member states with the highest company tax and average investment tax as at 1 July 2011, while the lowest rates are found in Bulgaria, the Baltic States, Ireland and Romania. This emerged from a 2011 interim report on effective taxation rates in the expanded EU, drawn up for the European Commission by the Centre for European Economic Research (ZEW), published on 23 October 2012.
The report was prepared using the Devereux/Griffith methodology and pays detailed attention to changes in the effective rate of taxation on investment in the EU27 from 1998 to 2011, along with EU candidate countries Croatia, the Former Yugoslav Republic of Macedonia (FYROM) and Turkey and close OECD partners (Norway, Switzerland, Canada, Japan and the United States) from 2005 to 2011. It examines variations in both nominal and effective rates of company taxation in each country, also analysing investment tax and savings taxation for individuals. The report looks into cross-border investment and investment by small and medium-sized businesses, focussing on the impact of the tax reforms in the EU27 in 1998-2009 on both national and international investment.
The first section of the report examines company taxation for 1998-2011, establishing a methodology used to calculate effective taxation rates and highlighting substantial differences in effective taxation rates among EU27 countries and variations within countries over the nominal taxation rate over the same period. The two extremes are illustrated by France, where the effective company taxation rate stood at 35.4% on 1 July 2011 (nominal tax rate of 33.3%); and at the other extreme, Ireland, which had an effective company taxation rate of 12.5% on the same date (nominal rate 12.5%) and -even lower - 10% in Bulgaria (10% nominal rate) on the same date. The nominal taxation rate for companies in France did not alter over the period in question (33.3 %), but the effective rate fell from 41.67 % in 1998 to 35.42%. Over the same period, Bulgaria, an ex-Communist country, saw its nominal company taxation rate fall from 30% to 10%, and its effective tax rate from 37% to 10%. Closer to France, Ireland saw both nominal and effective rates rising over the period of study, from 10% to 12.5%, although they are still among the lowest in the EU. These differences illustrate the disparity of tax rates for companies operating in the single market. (FG/transl.fl)