SOME ASPECTS REGARDING THE STRUCTURE OF TAXATION SYSTEMS IN THE EUROPEAN UNION COUNTRIES

Abstract: Taxation has, and will retain, a central place in economic policy. This paper sheds some light on current EU trends, regarding tax structures by type of tax (direct taxes, indirect taxes and social contributions), the level of personal income tax rates which differ very substantially, ranging from 16 % to 59 % and the level of corporate income tax rates which continue their rapid decline throughout the European Union. The European Union, taken as a whole, is a high-tax area. In 2006, the last year for which detailed data are available, the overall tax ratio, amounted to 39,9 % of GDP. This value is about 12 percentage points above those recorded in the United States and Japan. The EU tax-to-GDP ratio is high not only compared with these two countries but in general; amongst the major non-European OECD members, only New Zealand has a ratio that exceeds 35 per cent of GDP. The high general average by no means implies that every EU Member State displays a high tax ratio; on the contrary, ten Member States display ratios below the 35 % mark. On the whole, the differences in taxation levels across the Union are quite marked; the overall tax ratio (which includes social security contributions) ranges over more than twenty points of GDP, from 49,1 % in Denmark to merely 28,6 % in Romania, reflecting the significant differences within Member States in the role played by the State