Steady decline in top personal and corporate income tax rates since 2000
The overall tax-to-GDP ratio1 in the EU272 was 39.8% in 2007, a slight increase from 39.7% in 2006. The EU27 tax ratio, which stood at 40.6% in 2000, fell to 38.9% by 2004 and then started to rise.
The overall tax ratio in the euro area2 (EA16) was 40.4% in 2007, and also rose slightly from 40.3% 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 USA and Japan by some 12 percentage points. However, the tax burden varies significantly between Member States, ranging in 2007 from less than 30% in Romania and Slovakia (both 29.4%) and Lithuania (29.9%), to a little less than 50% in Denmark (48.7%) and Sweden (48.3%).
Since 2000, significant changes in tax-to-GDP ratios have taken place in several Member States. The largest falls were recorded in Slovakia, where the overall tax burden dropped from 34.1% in 2000 to 29.4% in 2007, and Finland (from 47.2% to 43.0%). The highest increases were observed in Cyprus (from 30.0% to 41.6%) and Malta (from 28.2% to 34.7%).