Taxes Being Hiked in the EU

May 22, 2012 Taxation in EU

Taxes Being Hiked in the EULUXEMBOURG – Corporate taxes, personal taxes and consumption taxes have all been hiked in the EU during 2012, putting an end to years of decreasing tax rates and falling tax obligations.

On May 21st Eurostat released the latest edition of the annual Taxation Trends in the European Union report, detailing changes in tax rates in the countries of the European Union over the course of 2012. According to the report, throughout this year the rates of all taxes in the EU rose, and the most significant increases were seen in the 17 countries of the Eurozone.

The average rate of consumption taxes in the EU is now 21 percent, compared to a rate of 20.7 percent in 2011. Currently Luxembourg and Cyprus have the lowest VAT rates at 15 percent and 17 percent respectively, and the highest rate is in Hungary at 27 percent.

The top rates for personal income taxes in Europe have also risen, reaching an average 38.1 percent amongst all of the EU member states and 43.2 percent in the countries of the Eurozone, with the rates rising by 0.6 percent and 1 percent respectively since last year.

The rates of corporate income tax were also reported to have risen in 2012, although not by the same extent as consumption and personal income taxes. Currently, the average rate of corporate tax across all of the EU members is 23.5 percent, compared to a rate of 23.4 percent in the previous year. The rate of corporate taxes in the Eurozone countries is marginally higher, at 26.1 percent, which is 0.2 percent more than in 2011.

The European Commission is expected to use the data in the report to compile a set of tax policy recommendations for each EU member state by the end of the month.

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