EU tax ratio remains high

The EU27 tax ratio is more than one third above the levels recorded in the USA and Japan, new figures show.

The overall tax-to-GDP ratio in the EU was 39.3 per cent in 2008, the first year of the crisis, compared with 39.7 per centin 2007, according to new European Commission figures.

In comparison with the rest of the world, the EU27 tax ratio remains generally high however, the burden varies significantly between Member States

The data shows Ireland still has one of the lowest corporation tax rates in the European Union. However, the Irish rate at 12.5 per cent is being undercut by both Cyprus and Bulgaria at 10 per cent.

The highest statutory tax rates corporate income at present are in Malta and France at 35 per cent.

The latest figures indicate that the overall trend across the EU is downwards with several countries reducing their corporate tax rates this year.

Between 2000 and 2010, the largest decreases were registered in Bulgaria, where rates dropped from 32.5 per cent to 10.0 per cent, Germany, which declined from 51 per cent to 29.8 per ent and Cyprus, which fell from 29 per cent to 10 per cent.

The average top personal income tax rate in the European Union increased in 2010, largely due to a 10-percentage point hike in the United Kingdom, bringing top British rates to 50 per cent. Ireland's top rate is 41 per cent, down 3 per cent since 2000.

The highest top rates for personal income tax in 2010 are in Sweden at 56.4 per cent, Belgium, 53.7 per cent and the Netherlands at 52 per cent. The lowest rate is in Bulgaria at just 10 per cent.