FFE Magazine

Which EU countries have the highest Taxes?


17jun eu taxes


Taxes are the amount you pay to the government for its projects. They directly affect how much money you’re actually left with to spend for personal use.


A recently published 2012 survey by Eurostat revealed the countries in the EU where people pay the highest amount of taxes, including labour taxes imposed to businesses.


Eurostat used tax-to-GDP ratio and amount of labour tax to compare the countries. Tax-to-GDP ratio is the percentage of tax collected against the gross domestic product (GDP). Tax refers to the total amount paid by people and corporations to the government while GDP refers to the value of products produced by a country.


Labour tax refers to taxes and mandatory contributions imposed to businesses. In all 28 EU states, labour tax is the biggest source of tax revenue at 51.0%. Consumption taxes (taxes on goods and services) follow at 28.5% while taxes on capital are at 20.8%.


We always assume that countries with good social welfare system collect more taxes compared to countries with providing less social benefits to its people. A surprising revelation of this survey however shows that Norway a country with a very strong social security system collects less tax than Italy and France.


Here are the countries with the highest tax-to-GDP ratio out of all the 28-member EU countries plus Iceland and Norway:

  • Denmark at 48.1%
  • Belgium, 45.4%
  • France, 45.0%
  • Italy, 44%


Across the EU, the average tax-to-GDP ratio is 39.4% in 2012. EU countries that registered a drop in tax burden from 2011 to 2012 include:

  • Lithuania from 27.4% to 27.2%
  • Portugal from 33.2% to 32.4%
  • Romania from 28.4% to 28.3%
  • Slovakia from 28.6% to 28,3%
  • Sweden from 44.4% to 44.2%
  • UK from 35.8% to 35.4%
  • Norway from 42.7% to 42.2%


Meanwhile, the countries with the highest amount of labour tax in the EU countries plus Iceland and Norway include:

  • Sweden at 58.6%
  • Netherlands, 57.5%
  • Austria, 57.4%
  • Germany, 56.6%


On average, EU countries impose 38.5% on labour taxes. Countries with the lowest labour tax include:

  • Bulgaria at 32.9%
  • Malta, 34.6%
  • Cyprus, 37.1%
  • UK, 38.9%


Below is a table summarising all changes in tax-to-GDP ratio and tax revenues in the EU countries plus Iceland and Norway from 2002 to 2012:


17jun taxes eu






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