European
Taxation in the EU25 1995-2004; Tax revenue ranged from 29% of GDP in Lithuania and Latvia to 51% in Sweden; Ireland increased to 33.7% in 2004
By Finfacts Team
Feb 10, 2006, 10:58

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In 2004, tax revenue1 (i.e. the total amount of taxes and social contributions) in the EU252 stood at 40.7% of GDP, compared with 40.9% in 2003. After increasing from 41.2% in 1995 to 42.4% in 1999, the tax-to-GDP ratio then declined steadily to 40.8% in 2002.

The trend in the euro-zone was similar: tax revenue rose from 41.6% of GDP in 1995 to 43.0% in 1999, then fell to 41.1% in 2004.

These figures come from a publication3 issued by Eurostat, the Statistical Office of the European Communities. This report gives additional information on the evolution of tax revenue in the EU and the Member States between 1995 and 2004, and on the breakdown of tax revenue across Member States by main tax category.

Tax revenue ranged from 29% of GDP in Lithuania and Latvia to 51% in Sweden

Among the Member States there were substantial differences in the tax-to-GDP ratio. In 2004 Sweden (51.2%) recorded the highest ratio, followed by Denmark (49.9%), Belgium (47.4%), France (45.3%), Finland (44.5%) and Austria (44.3%). The lowest ratios were observed in Lithuania (28.7%), Latvia (29.1%), Slovakia (30.6%), Ireland (31.7%), Estonia (32.7%) and Cyprus (33.7%).

In 2004, as compared with 2003, tax revenue as a proportion of GDP rose in fourteen Member States, fell in ten and remained stable in Sweden. The highest increases in the tax-to-GDP ratio were recorded in Malta (from 34.5% in 2003 to 36.7% in 2004), Ireland (from 30.4% to 31.7%) and Denmark (from 48.7% to 49.9%). The largest reductions were observed in Greece (from 39.0% to 37.7%), Germany (from 41.0% to 40.0%) and Italy (from 43.0% to 42.1%).

Variation in structure of taxation between Member States

At EU25 level, the three main categories of taxes4 contribute roughly equally to total tax revenue: in 2004 taxes on production and imports, such as VAT, import and excise duties, accounted for 34% of the total tax revenue, actual social contributions for 32% and taxes on income and wealth for 31%.

The structure of taxation varies considerably between Member States. In 2004, Lithuania (11.3%), the Czech Republic and Germany (both 12.0%) recorded the lowest ratios of taxes on production and imports to GDP, compared to an EU25 average of 13.8%. On the other hand, Denmark (17.7%), Cyprus (17.2%) and Sweden (17.1%) had the highest ratios.

With regard to taxes on income and wealth, Denmark (30.0%), Sweden (19.4%) and Finland (17.8%) recorded the highest ratios to GDP, compared to an EU25 average of 12.5%, while Slovakia (6.1%), Poland (6.7%) and Latvia (8.0%) registered the lowest ratios.

For actual social contributions, the largest ratios to GDP were observed in Germany (16.8%), France (16.3%) and the Czech Republic (15.1%), compared to an EU25 average of 13.1%, whereas Denmark (1.2%), Ireland (4.6%) and Malta (6.9%) recorded the lowest ratios. Denmark's social security system is, in fact, almost exclusively financed by general taxation.

Total taxes, % of GDP
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004









EU25
41.2
41.8
42.0
41.9
42.4
42.2
41.4
40.8
40.9
40.7
Euro-zone
41.6
42.4
42.8
42.5
43.0
42.8
41.9
41.4
41.5
41.1









BE
45.9
46.5
47.0
47.6
47.6
47.3
47.4
47.5
47.2
47.4
CZ
36.2
35.2
35.5
34.0
34.8
34.5
34.6
35.5
36.1
36.6
DK
49.8
50.1
49.9
50.3
50.9
50.2
49.3
49.1
48.7
49.9
DE
41.3
42.3
42.2
42.4
43.2
43.3
41.4
40.9
41.0
40.0
EE
37.9
35.6
35.9
34.9
34.6
32.6
31.7
32.5
33.0
32.7
EL
34.7
35.1
36.4
38.4
39.6
40.9
39.1
39.9
39.0
37.7
ES
33.6
34.0
34.1
33.9
34.4
34.8
34.3
34.7
34.8
35.4
FR
44.5
45.7
45.9
45.8
46.8
45.9
45.6
44.9
45.0
45.3
IE
34.9
34.7
33.9
33.1
33.0
32.9
31.0
29.7
30.4
31.7
IT
42.9
43.2
45.1
43.6
43.6
43.0
42.8
42.4
43.0
42.1
CY
26.7
26.4
25.8
27.7
28.0
30.0
30.9
31.2
32.9
33.7
LV
33.7
31.4
32.7
34.4
32.6
30.1
29.0
28.7
29.0
29.1
LT
28.6
28.1
29.8
32.3
32.1
30.1
28.7
28.4
28.2
28.7
LU
43.7
43.8
42.8
41.3
41.5
41.3
41.5
42.0
41.9
41.1
HU
41.7
40.6
39.0
39.1
39.2
39.6
40.0
39.1
39.1
39.2
MT
31.3
29.9
31.6
29.9
28.9
30.1
32.6
34.8
34.5
36.7
NL
40.5
40.8
40.6
40.3
41.6
41.5
39.4
38.7
38.5
38.8
AT
43.6
44.8
46.2
46.2
45.8
44.8
46.5
45.5
44.8
44.3
PL
39.4
38.1
37.6
36.7
37.2
35.2
34.7
35.5
34.4
34.3
PT
32.7
33.5
33.6
33.9
34.8
35.2
34.9
35.7
36.3
35.6
SI
40.5
39.1
38.2
39.0
39.4
38.8
39.1
39.4
39.7
39.9
SK
40.6
39.1
35.9
37.1
34.7
33.2
32.9
32.5
31.4
30.6
FI
46.2
47.5
46.7
46.4
46.8
47.9
45.8
45.7
44.8
44.5
SE
49.7
52.1
52.6
53.4
54.0
54.1
52.1
50.5
51.2
51.2
UK
36.7
36.3
36.8
37.8
38.1
38.7
38.5
37.0
37.0
37.7

Tax revenue by main tax categories % of GDP
Production and imports
Income and wealth
Actual social contributions
1995
2000
2004
1995
2000
2004
1995
2000
2004








EU25
13.5
14.1
13.8
12.2
13.8
12.5
14.1
13.1
13.1
Euro-zone
13.1
13.9
13.7
11.2
12.8
11.4
15.8
14.9
14.6








BE
12.9
13.8
13.6
16.3
17.1
16.8
14.4
13.9
14.1
CZ
12.3
11.5
12.0
9.6
8.4
9.4
14.4
14.5
15.1
DK
17.0
17.2
17.7
30.7
30.3
30.0
1.1
1.8
1.2
DE
12.0
12.5
12.0
10.8
12.3
10.0
17.3
17.3
16.8
EE
13.9
12.9
13.0
10.9
8.1
8.5
13.1
11.6
11.1
EL
14.4
15.8
14.1
7.4
10.8
8.8
10.5
11.7
12.2
ES
10.7
11.9
12.2
9.9
10.2
10.2
11.8
12.0
12.2
FR
16.0
15.8
15.7
8.1
12.0
11.1
18.6
16.1
16.3
IE
14.5
13.7
13.2
13.5
13.3
12.3
4.9
4.4
4.6
IT
12.7
15.5
14.7
14.8
14.7
13.7
13.0
12.4
12.7
CY
11.4
12.4
17.2
8.7
10.9
8.1
6.5
6.5
7.7
LV
14.3
12.5
12.1
7.2
7.4
8.0
12.1
10.0
8.8
LT
12.3
12.6
11.3
8.8
8.4
8.8
7.6
9.3
8.4
LU
13.5
14.5
14.7
17.5
15.4
13.9
11.2
10.4
11.3
HU
17.8
16.4
16.3
8.8
9.9
9.2
14.9
13.2
13.5
MT
13.8
12.9
15.9
9.2
9.4
12.2
6.8
6.6
6.9
NL
11.9
13.0
13.0
12.4
12.1
10.5
16.0
16.0
14.0
AT
14.8
15.1
14.8
11.6
13.1
13.3
14.9
14.7
14.5
PL
15.0
13.8
13.9
12.8
7.4
6.7
11.7
14.0
14.0
PT
13.9
14.1
14.6
8.4
9.8
8.7
9.6
10.3
11.3
SI
15.9
16.3
16.5
7.0
7.5
8.4
17.3
14.7
14.7
SK
15.6
13.0
12.7
11.6
7.6
6.1
14.3
13.7
12.3
FI
14.1
14.1
14.3
17.2
21.3
17.8
14.4
12.2
12.1
SE
16.1
16.8
17.1
19.9
22.2
19.4
13.0
14.4
13.9
UK
14.1
14.2
13.6
14.9
16.6
15.6
6.8
6.9
7.7

  1. Tax revenue of general government is defined as taxes on production and imports, current taxes on income and wealth, capital taxes and compulsory and voluntary actual social contributions and imputed social contributions, The definition differs slightly from the one used in the publication “Structures of the taxation systems in the EU” (see News Release 134/2005, 21 October 2005). The latter excludes the voluntary and imputed social contributions and the difference between the two measures amounts to around one percent of GDP.
  2. EU25: Belgium (BE), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Greece (EL), Spain (ES), France (FR), Ireland (IE), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK).
  3. Eurostat, Statistics in Focus, Economy and Finance, 2/2006, "Tax revenue in the EU: Down slightly to 40.7% of GDP". The publication is available free of charge in PDF format on the Eurostat website.
  4. The three main categories of taxes comprise:

Taxes on production and imports including value added tax (VAT), import duties, excise and other specific taxes on products and other taxes on production.

Taxes on income and wealth including personal and corporate income taxes.

Actual social contributions comprising employers’, employees’, self-employed and non-employed actual social contributions.

Capital taxes and imputed social contributions are not included in these main categories.



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