The overall tax-to-GDP ratio 1 in the 27 European Union member states was 39.8 per cent in 2007, a slight increase from 39.7 per cent in 2006. The EU27 tax ratio, which was 40.6 per cent in 2000, fell to 38.9 per cent by 2004 and then started to rise.
 
This is according to the 2009 edition of the publication Taxation trends in the European Union issued by Eurostat, the Statistical Office of the European Communities and the Commission’s Directorate-General for Taxation and Customs Union., released on June 22 2009.
 
The overall tax ratio in the euro area, the 16 states using the common European currency, was 40.4 per cent in 2007, and also rose slightly from 40.3 per cent in 2006. Since 2000, taxes in the euro area have followed a similar trend to the EU27, although at a slightly higher level.
 
In comparison with the rest of the world, the EU27 tax ratio remains generally high, exceeding those of the United States and Japan by about two percentage points. However, the tax burden varies significantly among EU member States, ranging in 2007 from less than 30 per cent in Romania and Slovakia (both 29.4 per cent) and Lithuania (29.9 per cent), to a little less than 50 per cent in Denmark (48.7 per cent) and Sweden (48.3 per cent).
 
Since 2000, significant changes in tax-to-GDP ratios have taken place in several member states. The largest falls were in Slovakia, where the overall tax burden dropped from 34.1 per cent in 2000 to 29.4 per cent in 2007, and Finland (from 47.2 per cent to 43 per cent). The highest increases were observed in Cyprus (from 30 per cent to 41.6 per cent) and Malta (from 28.2 per cent to 34.7 per cent).
 
The top personal income tax rate differs substantially within the EU. The highest top rates on 2008 personal income are found in Denmark (59 per cent), Sweden (56.4 per cent) and Belgium (53.7 per cent), and the lowest in Bulgaria (10 per cent), the Czech Republic (15 per cent) and Romania (16 per cent).
 
The report said that since 2000, top personal income tax rates have fallen or remained unchanged in all EU member states, except Sweden (from 51.5 per cent in 2000 to 56.4 per cent in 2008) and Portugal (from 40 per cent to 42 per cent). The largest decreases were registered in Bulgaria (from 40 per cent to 10 per cent), Romania (from 40 per cent to 16 per cent) and Slovakia (from 42 per cent to 19 per cent), all of which moved to flat rate systems.
 
The highest statutory tax rates on 2009 corporate income are recorded in Malta (35 per cent), France (34.4 per cent) and Belgium (34 per cent), and the lowest in Bulgaria and Cyprus (both 10 per cent) and Ireland (12.5 per cent).
 
Since 2000, top corporate income tax rates have fallen or remained unchanged in all member states, except Hungary (from 19.6 per cent in 2000 to 21.3 per cent in 2009). The largest decreases were in Bulgaria (from 32.5 per cent to 10 per cent), Germany (from 51.6 per cent to 29.8 per cent) and Cyprus (from 29 per cent to 10 per cent).
 
 
Labour taxes remain the largest source of tax revenue, representing close to half of total tax receipts in the EU27. Taxes on capital accounted for about 23 per cent of total tax receipts, and consumption taxes for 28 per cent.
 
The average implicit tax rate (ITR) on labour, a broad measure of the tax burden falling on work income, was unchanged in the EU27 at 34.4 per cent in 2007 compared with 2006, after having declined steadily from 35.9 per cent in 2000. ITR measure the average tax burden on different types of economic income or activities, i.e. on labour, consumption and capital. ITR express aggregate tax revenues as a percentage of the potential tax base for each field.
 
Among EU member states, the ITR on labour ranged in 2007 from 20.1 per cent in Malta, 24 per cent in Cyprus and 25.7 per cent in Ireland to 44 per cent in Italy, 43.1 per cent in Sweden and 42.3 per cent in Belgium.
 
Continuing an upward trend that started in 2002, the average ITR on consumption in the EU27 increased marginally, from 22 per cent in 2006 to 22.2 per cent in 2007.
 
ITR on consumption (the ratio between the revenue from consumption taxes and the final consumption expenditure of households on the economic territory) were highest in 2007 in Denmark (33.7 per cent), Sweden (27.8 per cent) and Hungary (27.1 per cent), and lowest in Greece (15.4 per cent), Spain (15.9 per cent) and Italy (17.1 per cent).
 
In the EU27, the average ITR on capital (ITR on capital includes, in the numerator, the taxes levied on the income earned from savings and investments by households and corporations and taxes related to stocks of capital stemming from savings and investment in previous periods) for the member states for which data are available was 28.7 per cent in 2007 .
 
The highest implicit tax rates on capital were recorded in Cyprus (50.5 per cent), Denmark (44.9 per cent) and the United Kingdom (42.7 per cent), and the lowest in Estonia (10.3 per cent), Lithuania (12.1 per cent) and Latvia (14.6 per cent).
 
Energy taxes include taxes on energy products such as mineral oils, gas and electricity for both transport and stationary purposes. They are by far the most important environmental taxes, representing around three quarters of environmental tax receipts in the EU. In the EU27, energy taxes amounted to 1.8 per cent of GDP in 2007, and ranged from 1.2 per cent of GDP in Greece and Ireland to three per cent in Bulgaria.
 
Taxes on transport fuels are the most important part of energy taxes, and represented more than 80 per cent of energy taxes in the EU27 in 2007, the report said.
 
The highest transport fuel taxes as a percentage of total energy taxation were found in Latvia (100 per cent), Lithuania and Luxembourg (both 98 per cent), and the lowest in Denmark (52 per cent), Sweden (56 per cent) and the Netherlands (68 per cent).