Tax revenue statistics

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Data from December 2012. Most recent data: Further Eurostat information, Main tables and Database.
For recently updated ESA table 9, please see section 'Further Eurostat information, Main tables and Database'; current cut-off date for National tax list data is 07 May 2013.

This article presents recent data on tax revenue and its relationship to gross domestic product (GDP) in the European Union (EU) and the euro area (EA-17). The latest year for which detailed tax revenue statistics are available for all Member States is 2011. This data is published on Eurobase. In addition, Eurostat publishes revenue and economic function data for individual taxes (the National Tax Lists or NTL) delivered by Member States as well as Norway and Iceland alongside the aggregated tax revenue data under the ESA95 transmission programme (please see further down.)

In 2011, tax revenues in the European Union increased both in absolute terms and as a ratio to GDP.

As a ratio of GDP, tax revenues (including social contributions) accounted for 40.0 % of GDP in the European Union (EU-27) and 40.8 % of GDP in the euro area (EA-17). This represents an increase of 0.4 pp. of GDP in the EU-27 and 0.5 in the EA-17. In absolute terms, tax revenues in 2011 surpassed pre-crisis levels both in the EU-27 and the euro area.

In 2011 tax revenues made up just under than 90 % of total general government revenue in the European Union. Taxes on production and imports accounted for 13.4 % of GDP and current taxes on income, wealth, etc. 12.6 % of GDP. The share of current taxes on income, wealth, etc. has decreased from 2007 to 2010, but a slight increase is noted in 2011. The share of social contributions increased noticeably from 2008 to 2009, went on to decrease further in 2010, but stayed relatively stable between 2010 and 2011, to stand at 13.9 % of GDP.

Figure 1: Total tax revenue in the EU-27 and euro area as a percentage of GDP, 1995-2011
Source: Eurostat (gov_a_tax_ag)

Contents

Main statistical findings

Figure 2: Ranking of total tax revenue by Member States and EFTA countries in 2011 as a % of GDP
Source: Eurostat (gov_a_tax_ag)

Evolution of tax revenue

In 2011, EU-27 tax revenue (including actual and imputed social contributions, please refer to the methodological note) of general government (including institutions of the EU) in terms of GDP increased substantially to 40.0 % of GDP (up from 39.6% of GDP in 2010), following four years of decline in terms of GDP. Tax revenues in the EA-17 followed a similar trend and increased from 40.3 % of GDP in 2010 to 40.8 % of GDP in 2011. The pattern for EU-27 and EA-17 is fairly similar in recent years. Both in the EU-27 and in the EA-17, the drop in terms of GDP was most marked between 2008 and 2009. In 2010, tax revenues in terms of GDP were at their lowest point in the 1995-2011 period.

Tax revenue-to-GDP ratio

Tax revenue-to-GDP ratio: Denmark, Belgium and France show the highest ratios

In 2011, tax revenue (including social contributions) in the EU-27 stood at 40.0 % of GDP, accounting for about 90 % of total government revenue. The ratio of tax revenue to GDP in the euro area (EA-17) was slightly higher than in the EU-27, at 40.8 %. As Figure 2 shows, the ratio of tax revenue to GDP was highest in Denmark, Belgium and France (48.6 %, 46.7 % and 45.9 % respectively in 2011); the lowest shares were recorded in Lithuania (26.4 % of GDP), Bulgaria (27.2% of GDP) and Latvia (27.7 % of GDP).

Among the countries which have joined the EU since 2004, Slovenia and Hungary had the highest tax revenue-to-GDP ratios at 37.5 % and 37.1 % of GDP, respectively. Even so, tax revenues in Slovenia are still 2.5 pp. of GDP lower than in the EU-27. Amongst the countries which joined the EU before 2004, Ireland (30.4 % of GDP), Spain (32.4 % of GDP) and Greece (34.9 % of GDP) record the lowest revenues from taxes. It is interesting to note that the arithmetical average of the 27 countries is somewhat lower (36.6 %) than the GDP-weighted EU average, due to the relatively low levels of GDP (and therefore low weight) for some of the countries which tend to have low tax revenues.

In 2011, tax revenues in absolute terms surpassed pre-crisis levels

The effects of the economic and financial crisis on tax revenues from 2007 onwards are apparent. From its last spike in 2006 in the EU-27 the ratio of tax revenue to GDP decreased by 1.1 percentage points to 39.6 % in 2010, while the ratio for the EA 17 also decreased by 0.9 percentage points of GDP from its peak of 41.2 % in 2007 to 40.3 % in 2010. In 2011, tax revenues in terms of GDP increased substantially, which was due to absolute tax revenues increasing along the same path as in the previous year, but nominal GDP growth being lower. This reflects pro-active tax measures taken by Member States during the last years to correct their deficits. EA-17 tax revenue as a percentage of GDP remains at a slightly higher level than EU tax revenue (Figure 1).

Figure 3: Evolution of tax revenue in the EU-27 and EA-17, billions of Euro, 2001-2011
Source: Eurostat (gov_a_tax_ag)

There are many reasons why government tax revenue varies from year to year. It would take a more in-depth analysis in order to explain the causes of such variations in particular countries. However, in general, the main reasons are changes in economic activity (affecting levels of employment, sales of goods and services, etc.) and in tax legislation (affecting tax rates, the tax base, thresholds, exemptions, etc.) as well as changes in the level of GDP affecting the ratio. The crisis – together with measures of fiscal policy adopted in the countries – has a strong impact on the level and composition of tax revenue in 2009-2011, although first effects had already become visible in 2008. It should be noted, that even when using accrual methods of recording, the effects of changes in legislation or economic activity tend to have a delayed impact on tax revenue.

As shown in Table 1, tax revenue in terms of GDP fell in 11 EU Member States from 2010 to 2011. Estonia (1.3 percentage points of GDP) and Lithuania (1.0 pp) recorded the largest declines. In both countries, total tax revenues were already at low levels.

Tax revenue in terms of GDP increased in 16 Member States and all three EFTA countries. The strongest increases in tax revenue relative to GDP were seen in France (1.4 pp), Portugal (1.3 pp), the Czech Republic and Finland (both 1.0 pp).

Even in absolute terms, tax revenue fell in the EU and the euro area between 2008 and 2009 - for the first time in the period from 1995 onwards (see Figure 3), before steadily rising again to surpass pre-crisis levels in 2011 in both areas. The proportional increase in tax revenues was higher than the proportional increase in GDP, which has also resulted in an increase in the tax-revenue-to-GDP ratio in both the EU and the euro area.

This recovery in tax revenues can at least partly be attributed to active revenue raising measures in some Member States such as increases in the VAT rate and the introduction of new taxes, such as bank levies, air passenger duties and property taxes.

Indirect taxes, direct taxes and social contributions

Indirect taxes, direct taxes and social contributions continue to contribute roughly equal shares to tax revenue in the EU-27

Figure 4: Evolution of the main components of tax revenue in the EU-27 in % of GDP, 1995-2011
Source: Eurostat (gov_a_tax_ag)

Tax revenue can be grouped into three main categories or types: indirect taxes defined as taxes linked to production and imports (such as value added taxes - VAT), direct taxes consisting of current taxes on income and wealth plus capital taxes, and social contributions that include actual social contributions (for paying into social security funds or other social insurance schemes) as well as imputed social contributions. In the ESA 95 classification, these categories correspond to the following transactions: taxes on production and imports (D.2), current taxes on income, wealth, etc. (D.5), capital taxes (D.91), social contributions (D.61) composed of actual social contributions (D.611) and imputed social contributions (D.612). Figure 4 shows the recent historical trend of D.2, D.5, and D.61 for the EU-27 relative to GDP.

In 2011 tax revenue in the EU-27 remained relatively equally distributed between social contributions (13.9 % of GDP), taxes on production and imports (13.4 %), and current taxes on income, wealth, etc. (12.6 %) (Figure 4). The revenue share of social contributions has increased noticeably from 2008 to 2009, decreased slightly from 2009 to 2010 and remained relatively stable between 2010 and 2011. However, the share of current taxes on income, wealth, etc. has decreased from 2007, but has shown a slight increase from 2010 to 2011. This could be primarily due to an increase in profits of corporations, rather than tax raising measures – the increase in this component of D.5 is stronger than the one in income taxes on individual or household income. From 2008 to 2009 the share of direct taxes decreased more than GDP, which could be due to the economic crisis affecting the profits of corporations and increased unemployment.

Figure 5: Breakdown of tax revenue by country and by main tax categories in 2011 (percentage of GDP)
Source: Eurostat (gov_a_tax_ag)

Taxes on production and imports have increased their share of total taxation from 2009 to 2011. This is at least partly due to increases in the VAT rates in many countries and the introduction of new taxes such as air passenger duties (recorded as an indirect tax) and bank levies, which are taxes on the balance sheets of credit institutions and are considered as property taxes. The exact nature of the tax base of bank levies differs between the Member States, which have introduced them, but in many cases these are recorded as indirect taxes or as capital taxes. Consequently, an increase in indirect taxes and capital taxes is observed.

For the euro area, a less even share of tax revenue was recorded among the main categories, with social contributions accounting for 15.7 % of GDP in 2011, while current taxes on income, wealth, etc. accounted for the lowest share, at 11.9 % of GDP and taxes on production and imports for 13.0 % of GDP. This last category is expected to have a shorter lag in reaction to the renewed growth in output, an assumption supported by the stronger increase in this transaction over the past two years recorded.

Table 1: Total tax revenue by country, 2001-2011 (%of GDP and millions of euro)
Source: Eurostat (gov_a_tax_ag)

EU-27 government revenue from taxes on production and imports (D.2) amounted to 33.6 % of the total taxes collected in 2011; 31.5 % was accounted for by current taxes on income, wealth, etc. (D.5), and 32.3 % and 2.5 % were recorded for actual (D.611) and imputed (D.612) social contributions respectively. Because of differing national tax structures, indirect taxes, direct taxes and social contributions vary considerably in importance from country to country in terms of the tax revenue they generate.

Taxes on production and imports (D.2) are divided into taxes on products (D.21) payable per unit of some good or service produced or transacted and other taxes on production (D.29). Taxes on products are further split into value added type taxes (VAT; D.211), taxes and duties on imports excluding VAT (D.212) and taxes on products except VAT and import taxes (D.214). The most important type of taxes on production and imports is VAT. In the EU-27, revenue from taxes on products accounted for about 90 % and VAT for around 53 % of the total taxes on production and imports in 2011. The biggest ratios of taxes on production and imports relative to GDP were recorded in Sweden (18.6 %), Denmark and Hungary (both 17.0 %), in line with the high overall level of taxation in the former two countries, with a high and increasing share also being recorded for Hungary, even though the total tax burden decreased. There is thus a shift towards indirect taxation in Hungary. The lowest ratios of these indirect taxes were recorded for Spain (10.2 %), Slovakia (10.8 %) and Switzerland (6.6 %), the latter having a low overall level of taxation (please refer to Table 2).

Table 2: Breakdown of tax revenue by country and by detailed tax categories in 2011 (% of GDP and millions of euro)
Source: Eurostat (gov_a_tax_ag)

Current taxes on income, wealth, etc. (D.5) include taxes on income (D.51) and other current taxes (D.59). Taxes on income cover both taxes on individual or household income and the income or profits of corporations, and include taxes on holding gains. By far the highest importance of such taxes is noted for Denmark which raised the equivalent of 29.7 % of GDP from these taxes in 2011. However, the comparatively high ratio for Denmark is due to the fact that most welfare spending is financed via taxes on income and, consequently, the figures for actual social contributions are very low relative to other countries. The next-highest figures are recorded by Norway and Sweden, which raise 21.6 % and 18.7 % of GDP respectively from current taxes on income, wealth, etc. At the other end of the scale, Lithuania (4.4 % of GDP in 2011) and Bulgaria (4.9 % of GDP in 2011) had relatively small revenues from these taxes.

Actual social contributions (D.611) are the main component of social contributions. This source of government revenue covers the compulsory and voluntary contributions paid to government by employees, employers, self- and non-employed persons and includes any amounts payable to government as an employer. As in past years, actual social contributions accounted for the highest ratios in GDP terms in France (16.9 %) and Germany (15.8 %) and for the lowest shares in Denmark, Iceland and Ireland (1.0 %, 4.1 % and 5.0 % respectively). In National Accounts, imputed social contributions (D.612) represent the counterpart of unfunded social benefits provided by the government as an employer. In 2011, they accounted for 2.9 % in Portugal and 2.6 % in both Belgium and Greece in terms of GDP, but for less than 0.1 % of GDP in ten other EU and EFTA countries.

More detailed breakdowns of D.2, D.5 and D.611 by country for 2011 are shown in Table 2. Besides the main transactions, Figure 5 also shows two minor components that are included in the definition of tax revenue: capital taxes (D.91) and capital transfers from general government to relevant sectors, representing taxes and social contributions assessed but unlikely to be collected (D.995). Capital taxes (D.91) are taxes levied at irregular and infrequent intervals on the net worth or value of assets owned, or transferred in the form of legacies or gifts. These taxes accounted for 0.3 % of GDP in the EU-27 in 2011, with low ratios mainly recorded for some of the new Member States and the Nordic countries. They range from 0.7 % of GDP in Belgium and 0.5 % in France and Hungary to being very small or non-existent in several countries. The high amounts in Hungary are due to a new tax on credit institutions introduced during 2010.

For the countries having (partially) implemented the assessment method of accrual recording (see methodological notes), capital transfers from general government to other sectors of the economy (D.995), representing taxes and social contributions assessed but unlikely to be collected, have to be deducted from tax revenue. In 2011, for the EU-27, this adjustment amounted to 0.1 % of GDP, with the highest shares being registered for Spain (0.8 %), followed by France (0.3%). High amounts recorded in this category cannot be interpreted as a country having a less efficient tax collection system, as the value depends on the method used for recording taxes.

Data sources and availability

Reporting of data to Eurostat

Data are collected by Eurostat on the basis of the European system of national and regional accounts (ESA 95) transmission programme, table 0900, 'Detailed tax and social contributions receipts by type and receiving sub-sector'. The legal requirement for transmission of data by EU Member States is at year t+9 months. The data in this article mainly corresponds to the end-September 2012 transmission, with DK having updated its data since.

In all cases, the data is consistent with the ESA table 0200 'main aggregates of general government' data released on 22 October 2012 (and which was updated by DK), except for some differences for PL for years before 2007.

Provisional data

Data for Greece is labelled provisional for 2003-2010.

Definition of government

The data relate to the general government sector of the economy, as defined in ESA95, comprising the sub-sectors central government, state government (where applicable), local government, and social security funds (where applicable).

For the purpose of this article the term 'general government' also includes taxes collected on behalf of the EU institutions. Thus it presents all tax revenues collected at the EU level.

Definition of tax revenue

The definition used in this article is ‘Total taxes and social contributions payable to general government, including those for government as an employer’. This corresponds to ‘Indicator 4’, the broadest of four indicators defined by the Eurostat National Accounts Working Group in June 2001. This indicator covers fully the series reported under table 0900 of the ESA 95 transmission programme. In particular it encompasses the wide diversity of social security systems in the EU.

The four indicators are defined as follows (the codes in brackets refer to ESA95 codes):

  • taxes on production and imports (D.2)
  • + current taxes on income, wealth, etc. (D.5)
  • + capital taxes (D.91)
  • - capital transfers from general government to relevant sectors representing taxes and social contributions assessed but unlikely to be collected (D.995)
  • + compulsory actual social contributions (D.611) payable to the social security funds (S.1314)

= Indicator 1 (total taxes and compulsory social security contributions);

  • + compulsory actual social contributions (D.611) payable to central government (S.1311), state government (S.1312), and local government (S.1313) subsectors as employers

= Indicator 2 (total taxes and compulsory actual social contributions payable to general government, including those for government as an employer);

  • + imputed social contributions (D.612) payable to general government as an employer

= Indicator 3 (total taxes and compulsory social contributions payable to general government, including those for government as an employer);

  • + voluntary actual social contributions payable to the general government sector

= Indicator 4 (total taxes and social contributions payable to general government, including those for government as an employer).

Comparing the four indicators, the trend in tax revenue remains very similar. In terms of level of tax revenue, Indicator 4 is roughly one percentage point of GDP higher than the Indicator 2 measure.

For a full analysis of tax structures, see the Eurostat / DG Taxud joint publication Taxation trends in the European Union, 2012 edition.

Time of recording

According to ESA 95, taxes and social contributions should be recorded on an accrual basis. Council Regulation 2516/2000 details the rules to be followed on the time of recording and the amounts to be recorded. Two methods can be used:

  • 'time-adjusted' cash − the cash is attributed when the activity took place to generate the tax liability or when the amount of taxes was determined in the case of some income taxes. This adjustment may be based on the average time difference between the activity and cash receipt;
  • a method based on declarations and assessments. In this case, an adjustment needs to be made for amounts assessed or declared but unlikely to be collected. These amounts have to be eliminated from government revenue, either by using a tax-specific coefficient based on past experience and future expectations or by recording a capital transfer for the same adjustment (ESA 95 code D.995) to the relevant sectors.

ESA 95 classifications and codes

  • D.2: TAXES ON PRODUCTION AND IMPORTS
  • D.21: Taxes on products
  • D.211: Value added type taxes (VAT)
  • D.212: Taxes and duties on imports excluding VAT
  • D.214: Taxes on products, except VAT and import taxes
  • D.29: Other taxes on production
  • D.5: CURRENT TAXES ON INCOME, WEALTH, ETC.
  • D.51: Taxes on income
  • D.59: Other current taxes
  • D.91: Capital Taxes
  • D.2_D.5_D.91: TOTAL TAX RECEIPTS
  • D.611: Actual social contributions
  • D.6111: Employers' actual social contributions
  • D.6112: Employees' social contributions
  • D.6113: Social contributions by self- and non-employed persons
  • D.612: Imputed social contributions
  • D.995: Capital transfers from general government to relevant sectors representing taxes and social contributions assessed but unlikely to be collected;

TOTAL (D.2_D.5_D.91_D.611_D.612_M_D.995): total receipts from taxes and social contributions (including imputed social contributions) after deduction of amounts assessed but unlikely to be collected;

Total general government revenue (TR) includes total taxes and social contributions as well as market output (P.11), output for final use (P.12), payments for other non-market output (P.131), other subsidies on production, receivable (D.39rec), property income, receivable (D.4rec), other current transfers, receivable (D.7rec) and capital transfers, receivable (D.9rec);

GDP at current prices (nominal GDP) is used throughout.

Symbols:

"-" ‘not applicable’, ‘real zero’ or ‘zero by default

":" not available

"pp" percentage points

Context

As a ratio of GDP, tax revenues (including social contributions) accounted for 40.0 % of GDP in the European Union (EU-27) and 40.8 % of GDP in the euro area (EA-17). This represents an increase of 0.4 pp. of GDP in the EU-27 and 0.5 in the EA-17. In absolute terms, tax revenues in 2011 surpassed pre-crisis levels both in the EU-27 and the euro area.

In 2011 tax revenues made up just under than 90 % of total general government revenue in the European Union.

Taxes on production and imports accounted for 13.4 %of GDP and current taxes on income, wealth, etc. 12.6 % of GDP. The share of current taxes on income, wealth, etc. has decreased from 2007 to 2010, but a slight increase is noted in 2011. The share of social contributions increased noticeably from 2008 to 2009, went on to decrease further in 2010, but stayed relatively stable between 2010 and 2011, to stand at 13.9 % of GDP.

Further Eurostat information

Publications

  • National Tax Lists - Excel publications
  • Statistical book and Statistics in Focus series

Main tables

Total general government revenue (tec00021)
Total general government expenditure (tec00023)
Taxes on production and imports (tec00020)
Current taxes on income, wealth, etc. (tec00018)
Social contributions (tec00019)

Database

Annual government finance statistics (gov_a)
Government revenue, expenditure and main aggregates (gov_a_main)
General government expenditure by function (COFOG) (gov_a_exp)
Main national accounts tax aggregates (gov_a_tax_ag)

Dedicated section

Methodology / Metadata

Other information

  • European Commission - DG Taxation and Customs Union:
  • Website dedicated to the Taxation trends report, including the full methodological annex to the Taxation trends report and the National Tax Lists for the 2013 edition of the Taxation trends report.
  • Database of main taxes in Europe

See also

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