Tax Policies in the EU Survey 2018

Jan 07, 2019

The European Commission published its annual report, The Tax Policies in the EU 2018 Survey.  The report examines how EU Member States' tax systems promote investment and employment, reduce tax fraud, evasion and avoidance, address income inequalities, and ensure social fairness.

EU Member States' taxation systems are stable in terms of their design in 2018 according to the report which noted the following points of interest:

  • In 2018, the average top rate of corporate income tax in the EU was 21.9 percent (2017: 21.9 percent). The trend of falling statutory corporation tax rates in the EU looks set to continue as France, Greece, the Netherlands and Sweden have all announced future reductions to the corporate income tax rate
  • An increasing number of Member States have implemented taxes or charges on plastic bags, generally targeting single-use plastic bags. In addition, several Member States have implemented taxes on other forms of single-use packaging, for example beverage packets
  • Growing trends and working conditions associated with digital platform work and non-standard contract type work will have policy implications for taxation in the future in terms of tax revenue sustainability, tax compliance and the manner in which social insurance is financed.
  • In the EU on average, half of the tax revenues stem from labour taxation, consisting of income taxes as well as employers’ and employees’ social contributions and almost 30 per cent stems from consumption taxes. Revenues from capital taxation, including corporate income taxes, represent only a small share of the tax mix in the EU
  • 18 of the 28 Member States apply a tax on inheritance and/or gifts. However, revenues from inheritance and gift taxes are relatively low in Europe, representing less than 1 percent of GDP in all Member States.