Brussels, 21/10/2005 (Agence Europe) - On Friday 21 October, the EU's statistical office Eurostat published a report on 'Taxation in the EU from 1995 to 2003' providing an in-depth analysis of the main trends in tax policy in the EU, with country-by-country information and an analysis of EU-wide trends since 1995. The survey contains data for all 25 Member States plus Norway. This year's report is particularly important because for the first time it covers the 10 new Member States, comparing overall tax burdens (tax to GDP ratio), implicit tax rates (ITRs, effective average tax burden calculated by dividing tax base by the tax revenues) and statutory personal income tax and corporate tax rates.
In 2003, the tax burden in EU Member States stood at 40.3% of gross domestic policy. This varies widely from country to country, ranging from 28.5% in Lithuania and 28.9% in Latvia to 48.8% in Denmark and 50.8% in Sweden. The total tax burden in relation to GDP of the new Member States is more than 7% lower than the corresponding tax rate in the old 15 Member States.
In all Member States, labour is taxed more than capital (20%) or consumption (30%). In 2003, the overall figures show a pause in the gradual decline in the ITR on labour recorded since the turn of the century. Corporate tax revenues in the EU25 increased from 2.1% to 2.8% of GDP from 1995 to 2000 and fell to 2.2% in 2003. Some differences can be seen between the old and new Member States. Generally, the new Member States have a substantially lower share of direct taxes on total revenues compared to the older EU15, but this is accompanied by social security revenue and indirect taxation (VAT, etc).
The fall in statutory corporate tax rates has been particularly rapid in the last five years. The average corporate statutory tax rate for the EU15 fell from 35.3% in 2000 to 30.1% in 2005. The same average for the new Member States fell from 27.4% to 20.6%. The decrease in statutory corporate tax rates has generally been accompanied by a broadening of the tax bases. The Commission comments that the figures show 'that - up to 2003 - there is no evidence of a race to the bottom despite the falling corporate tax rates' in the EU.