Taxation Reforms

Member StateTime PeriodType of TaxDirection of ReformDescription of Reform
Austria2010-Q1/2011-Q2Personal income taxDecreaseIn 2010, a tax allowance on income of self-employed was introduced.
Austria2010-Q1/2011-Q2Personal income taxIncreaseFrom 2011, capital income tax rates were harmonised at 25 % (also for private trusts) and the holding period after which realised speculative capital gains were tax exempt was abolished. Capital gains on shares, bonds, deposits are now subject to a final 25 % withholding tax. Single earner’s allowance is only granted if child support has been received.
Austria2011-Q1/2012-Q2Personal income taxIncreaseFrom 2011, capital income tax rates and rates for private trusts were harmonised at 25% and the holding period, after which realised speculative capital gains were tax exempt, was abolished. Capital gains on shares, bonds and deposits are now subject to a final 25% withholding tax [0.08% of GDP]. The single earner's allowance is only granted if child support has been received. The stability law from April 2012 contains several revenue-raising measures. They include a temporary progressive solidarity contribution for high income earners (from approximately € 186 000) on their holiday and Christmas pay (in force from 1 January 2013), and reducing the state premium on building saving and (third pillar) pension saving (in force from April 2012). To reflect PIT changes tax free earnings (Gewinnfreibetrag) have also been reduced.
Austria2012-Q1/2013-Q2Personal income taxIncreaseThe April 2012 stability law contains several revenue raising measures. These are: a temporary progressive solidarity contribution for high incomes (from approximately EUR 186 000) on the usually flat-taxed holiday and Christmas bonuses (from 1 January 2013), and a reduction in the state premium for property saving and (third pillar) pension saving (from April 2012). To mimic PIT changes, tax-free earnings (Gewinnfreibetrag) have also been reduced. The 2013 budget focused on closing existing PIT loopholes.
Austria2012-Q1/2013-Q2Personal income taxDecreaseTax deductions for commuters were increased, adding EUR 140 million in costs to the 2013 budget.
Austria2011-Q1/2012-Q2VAT IncreaseFrom September 2012, there are restrictions to deductibility and reclaiming of input VAT for premises.
Austria2012-Q1/2013-Q2VAT IncreaseFrom September 2012, input VAT deductions and refunds on premises have been restricted. The 2013 budget focused on closing existing VAT loopholes.
Austria2010-Q1/2011-Q2Corporate income taxDecreaseFor unincorporated businesses, tax allowances for business profits were increased from 10 % to 13 % from 2010 onwards; however, this was partially offset by the cancellation of the tax-favourable treatment for retained earnings.
Austria2011-Q1/2012-Q2Corporate income taxIncreaseFrom 2013 the deductibility for losses made in foreign subsidiaries is restricted in group taxation.
Austria2012-Q1/2013-Q2Corporate income taxIncreaseFrom 2013, deductions from group taxes for losses made in foreign subsidiaries are restricted.
Austria2010-Q1/2011-Q2Excise duty IncreaseEnvironmental tax measures cover the introduction of a flight tax, a stronger adjustment of the car registration tax according to the CO2 emission of the vehicles, and an increase in the mineral oil tax on diesel (+ 5 cents/litre) and petrol (+ 4 cents/litre), whereas commuter allowances were increased by 10 %. The motor vehicle tax for heavy trucks was lowered to the level of international standards. Furthermore, excises on tobacco were increased significantly.
Austria2011-Q1/2012-Q2Excise duty IncreaseIn 2011, the excise duty on petrol was increased by € 40 /1000 litres and on diesel by € 50 /1000 litres (€ 20/tonne of CO2) [0.16% of GDP]. Other environmental tax measures include a flight tax and a higher car registration tax depending on the CO2 emissions of the vehicles. Excise duties on tobacco were significantly increased in three stages, in January and June 2011 and in January 2012. From 1 January 2013 mineral oil tax reimbursement for agriculture and public transport is abolished.
Austria2012-Q1/2013-Q2Excise duty IncreaseExcise duties on tobacco were increased significantly in three steps, the latest in January 2012. As from 1 January 2013, mineral oil tax reimbursement for agriculture and public transport was abolished.
Austria2012-Q1/2013-Q2Excise duty DecreaseThe flight tax introduced in 2011 was reduced in 2013 for competitiveness reasons.
Austria2011-Q1/2012-Q2Social security contribution IncreaseFrom May 2012, social security contribution rates for farmers and the self-employed were increased. The ceiling for the SSC base will again be increased in 2013. Unemployment contributions will be levied on formerly exempt older workers (from 59 onwards) until they reach the legal minimum retirement age. Employers terminating an employment contract will be subject to a processing fee.
Austria2012-Q1/2013-Q2Social security contribution Increase From May 2012, social contribution rates for farmers and the self-employed were increased and there was an additional extraordinary increase in the ceiling for SSCs in 2013. Unemployment contributions will be levied on formerly exempt older workers (from the age of 59).
Austria2010-Q1/2011-Q2Other tax IncreaseA solidarity bank levy based on the total balance sheet (excluding own capital and secured deposits) was introduced, with rates ranging from 0 % for banks’ balance sheets of up to € 1 billion, 0.055 % for balance sheets up to € 20 billion and 0.085 % above that figure. Trading with derivatives will be taxed at 0.013 % of their volume.
Austria2011-Q1/2012-Q2Other tax IncreaseA bank levy based on the balance sheet total (excluding own capital and secured deposits) was introduced in 2011. It ranges from 0% for banks with balance sheets of up to € 1 billion to 0,055% up to € 20 billion and 0.085% above that [0.1% of GDP]. Derivatives trading will be taxed on 0.013% of its volume. Under the stability law, capital gains from rezoning of land property will be taxed and the 10-year holding period, after which realised gains from real estate sales are tax exempt, is abolished. An additional stability surcharge on banks and an advance tax payment on certain company pensions have been introduced in 2012.
Austria2011-Q1/2012-Q2Other tax IncreaseThe constitutional court struck down parts of the law on property transaction tax (on donations and inheritance), which must be put right by 2014. Employers terminating an employment contract will be subject to a process fee. An additional stability surcharge on banks was introduced from 2012. In 2012 an optional advance tax payment on certain company pensions was offered. In line with the stability law, realised capital gains stemming from rezoning land are taxed as of 1 April 2012 and the 10-year period after which gains made from real estate sales are tax exempt has been abolished. The 2012 bilateral tax agreement with Switzerland on untaxed interest and dividends paid to Austrian citizens, as part of a tax amnesty for self-reporting of undeclared assets held in Switzerland, is estimated to yield EUR 1 billion in 2013. In January 2013, a similar tax agreement was concluded with Liechtenstein and resulting revenues are expected from 2014 onwards.
Belgium2010-Q1/2011-Q2Personal income taxIncreaseThe number of overtime hours which qualify for reduced wage withholding tax was increased from 65 hours to 100 hours in 2009 and to 130 hours in 2010.
Belgium2011-Q1/2012-Q2Personal income taxIncreaseWith effect from 1 January 2012, the withholding tax on interest and dividends rose from 15% to 21%. An additional levy of 4% was introduced on the share of qualifying financial income exceeding € 20020 [0.2% of GDP]. PIT tax expenditure cuts include the abolishment of federal subsidies for environmentally-friendly cars and most of energy saving investments, which might only partly be replaced by regional subsidies. The base for taxation of company cars (catalogue value) was broadened for the user of the car. Moreover, company car taxation takes into account car-specific CO2 emission levels. From January 2012, the taxable benefit in kind for non-quoted stock options was increased from 15% to 18%.
Belgium2012-Q1/2013-Q2Personal income taxChangeTax expenditure cuts in PIT include the abolition of federal subsidies for environment-friendly cars (except electric cars) and energy saving investments, which will only partly be replaced by regional subsidies. As from 2013, withholding tax on all passive income is limited to 25 % (except for exempt saving accounts and government bonds issued at the end of 2011, for which the rate is 15 %) and the principle of final withholding tax has been restored.
Belgium2010-Q1/2011-Q2Corporate income tax DecreaseThe cap on the rate of the notional interest deduction was temporarily lowered from 6.5 % to 3.8 % in 2010 and 2011. This means that the actual ACE rate drops from 4.473 % in 2009 to 3.8 % (4.3 % for SMEs) in 2010 and 2011. As of January 2011, several incentives were introduced for entrepreneurs and companies. Lastly, several anti-abuse measures were introduced. A measure to carry over surpluses of dividends from subsidiaries under the participation exemption regime (PE) has recently been taken as a result of a decision of the European Court of Justice (Cobelfret judgment).
Belgium2011-Q1/2012-Q2Corporate income tax IncreaseIn line with the 2012 budget the cap for the notional interest deduction is reduced to 3% from tax year 2013 [0.4% of GDP]. The new base for company car taxation (catalogue value) also affects the company (with a new component in the tax base). Stricter thin capitalisation rules, lowering the maximum threshold for the tax deductibility of interest expenses, were introduced. The possibility of carrying forward the excess notional interest deduction will be abolished from tax year 2013.
Belgium2012-Q1/2013-Q2Corporate income tax ChangeA new provision to prevent abuse of notional interest deduction has been enacted. Shares that already qualify for the participation exemption will no longer qualify for the notional interest deduction. This measure does not cover intra-group loans.
Belgium2010-Q1/2011-Q2VATDecreaseThe VAT rate for food served in restaurants and catering services was reduced from 21 % to 12 % from 2010 onwards. The reduced VAT rate of 6 % on renovation works in residential houses and some labour-intensive services has become permanent.
Belgium2011-Q1/2012-Q2VATIncreaseFrom 1 January 2012 the VAT on digital television was increased from 12% to 21%. Notary and bailiff fees were made subject to the standard VAT rate [0.5% of GDP].
Belgium2012-Q1/2013-Q2VATChangeIn 2012, there were some targeted VAT increases (from the reduced rate to the standard rate for items such digital TV); the regime for notaries and bailiffs changed from exemption without right of deduction to taxation with right of deduction.
Belgium2010-Q1/2011-Q2Excise dutyDecreaseSeveral additional measures aimed at providing incentives for individuals and companies to favour cars with low emission levels. For individuals, a credit (directly on the invoice) of 15 % of the purchase price (up to a maximum of € 4 270) is granted for cars emitting less than 105g CO2/km and 3 % (with a maximum of € 800) for cars emitting between 105 and 115g CO2/km. For companies, zero-emission cars used for business purposes became deductible at 120 %, while the deduction of fuel costs for cars used for business and private purposes was reduced from 100 % to 75 %.
Belgium2011-Q1/2012-Q2Excise dutyIncreaseFrom January 2012, excises on tobacco were increased [0.04% of GDP].
Belgium2011-Q1/2012-Q2Other taxIncreaseFrom 1 January 2012, stock exchange stamp duty rose by 30% and another increase is scheduled from mid-2012.
Belgium2012-Q1/2013-Q2Social security contribution ChangeExisting reductions in employers’ social security contributions for the first three hires are being increased. The so-called ‘work bonus’ for the low paid has been boosted by increasing the existing social security reduction and the existing tax credit for the low paid, resulting in an additional monthly net salary increase of between EUR 68 and EUR 202 (for workers earning between the minimum wage and a gross monthly wage of  1 800). Conditional and targeted reductions in social security contributions payable on the wages of specific categories of personnel in the health care sector were also planned.
Bulgaria2010-Q1/2011-Q2Personal income taxDecreaseThe mortgage interest deduction for dwellings of young families, which was introduced temporarily in 2009, was prolonged and remained effective in 2010.
Bulgaria2012-Q1/2013-Q2Personal income taxChangeIn 2013, personal income tax rates were unchanged. As of 1 January 2013, interest income from individuals’ term deposits in banks, which had been exempt from taxation, was made subject to a 10 % withholding tax if received from a resident bank or levied by self-assessment if received from abroad.
Bulgaria2012-Q1/2013-Q2Corporate income tax ChangeCorporate income tax rates were unchanged.
Bulgaria2010-Q1/2011-Q2Social security contribution DecreaseSocial security contributions for the Pension Fund were reduced by 2 percentage points in 2010, but it increased by 1.8 percentage points as of 2011. As of 1 January 2010, the minimum monthly amount of self-employed insurance income on which contributions have to be paid was increased from BGN 260 (around € 133) to BGN 420 (€ 215) in order to limit the grey economy.
Bulgaria2011-Q1/2012-Q2Social security contribution IncreaseThe state pension contribution rate was increased from 16% to 17.8% in 2011.
Bulgaria2010-Q1/2011-Q2VATIncreaseThe reduced VAT rate on organised tourism services was raised as of 2011.
Bulgaria2011-Q1/2012-Q2VATIncreaseFrom April 2011 the reduced VAT rate on travel services was increased from 7% to 9%.
Bulgaria2010-Q1/2011-Q2Excise dutyDecreaseExcise duties on cars were abolished in 2010.
Bulgaria2010-Q1/2011-Q2Excise dutyIncreaseIn 2010, excise duties on electricity (for industrial needs), coal and cigarettes were increased. The excise duties on cigarettes were set at a rate that was almost 20 % above the EU required minima. The tax rate on the gross proceeds from gambling was raised from 10 % to 15 %. As of 2011, a tax on insurance premiums was introduced. There were further increases in excise duties in 2011.
Bulgaria2011-Q1/2012-Q2Excise dutyIncreaseFrom 1 January 2012 the excise duties on diesel, natural gas (used for transport purposes) and kerosene were increased. In June 2012, an excise duty on natural heating gas used by the businesses was introduced. [0.1% of GDP]
Bulgaria2012-Q1/2013-Q2Excise dutyChangeExcise duties on kerosene and gas oil used as motor fuel have been increased. In June 2012, an excise rate was introduced for natural gas used by businesses for heating. From December 2012, tax rates for some heavy fuels used for heating purposes were raised.
Croatia2012-Q1/2013-Q2Corporate income tax ChangeFrom 2013, entrepreneurs can deduct reinvested earnings from their tax liability.
Croatia2012-Q1/2013-Q2VATChangeThe standard rate has been 25 % since March 2012. From 1 January 2013, a reduced rate of 5 % applies to certain goods and services (bread and milk, books, certain medicines, orthopaedic aids, scientific magazines and public showings of films). A rate of 10 % applies to food preparation services and food and drinks serving in hotels and restaurants.
Croatia2012-Q1/2013-Q2Excise dutyChangeSpecial taxes on passenger cars were introduced and excise duties for new and second-hand cars equalised. Excise duties on energy, electricity and tobacco products were increased.
Croatia2012-Q1/2013-Q2Social security contribution ChangeFrom May 2012, the rate for compulsory health insurance contributions was lowered from 15 to 13 %.
Croatia2012-Q1/2013-Q2Other taxChangeVehicle Registration Tax and motor tax rates increased for all vehicles.
Cyprus2011-Q1/2012-Q2Personal income taxIncreaseIn August 2011, an additional tax bracket with a top rate of 35% for personal income over € 60000 was introduced, with effect from 1 January 2011. The tax rate on deemed and accrued dividend distribution was increased from 17% to 20% for a period of two years [0.1% of GDP]. The defence contribution on interest payments on deposits in local banks was also increased from 10% to 15%. In August 2011 a temporary special contribution to strengthen public finances was introduced. It is levied on gross wages at progressive rates for 24 months, starting on 1 September 2011 for public sector employees. This special contribution was extended to private sector employees and pensioners. The rates for public and private sector employees were set at 2.5% for income between € 2 501 to € 3 500, 3% for income between € 3 501 and € 4 500 and 3.5% for income above that.
Cyprus2012-Q1/2013-Q2Personal income taxChangeFrom 2012 to 2016 inclusive, a special contribution to boost public finances is being levied on gross wages, at rates of 2.5 % for income between EUR 2.501 and EUR 3.500, 3 % in the EUR 3501 to EUR 4500 tax bracket and 3.5 % above that. As of 2014, the rates will be: EUR 0 – 1 500: 0 %; EUR; 1 501 – 2 500: 2.5 %; EUR 2 501 – 3 500: 3.0 %; and > EUR 3 501 —: 3.5 %. In addition, the tax rate on interest income (the ‘special defence contribution’) increased to 30 % from May 2013. A lottery tax of 20 % on gains distributed to betting winners by the Greek Organisation of Football Prognostics S.A. (OPAP) and the National Lottery for winnings of EUR 5 000 or more tax was introduced.
Cyprus2012-Q1/2013-Q2Corporate income tax ChangeFrom 2013, Cyprus increased the statutory rate of CIT to 12.5 %. In addition, all exceptions on paying the annual levy of EUR 350 on registered companies (applied since 2011) have been abolished.
Cyprus2012-Q1/2013-Q2VATChangeThe main VAT rate increased by 1 percentage point to 18 % in 2013 and will increase to 19 % as from 2014. The reduced VAT rate will increase from 8 % to 9 % the same year.
Cyprus2010-Q1/2011-Q2VATIncreaseA 5 % reduced VAT-rate is applied on food and medicines from 10 January 2011. Previously these commodities were VAT exempt (0.4 % GDP).
Cyprus2011-Q1/2012-Q2VATIncreaseFrom 10 January 2011, 5% VAT on food and medicines, that were previously exempt, was introduced [0.4% GDP]. In line with the austerity package adopted in December 2011 the standard VAT rate was increased from 15% to 17% from 1 March 2012 [0.7% of GDP].
Cyprus2011-Q1/2012-Q2VATDecreaseFrom 1 November 2011 the reduced 5% VAT rate applies to the construction or purchase of first residences by eligible individuals.
Cyprus2011-Q1/2012-Q2Social security contributionIncreaseA permanent contribution of 3% of the gross earnings of current government employees towards government pension schemes was introduced. The contribution to the widows and orphans fund was increased by 1.25 pp to 2% of gross earnings [0.3% of GDP].
Cyprus2012-Q1/2013-Q2Social security contributionChangeAs from 2014, the contributions of salaried employees and employers to the GSIS will increase by an additional 1 percentage point of pensionable earnings, i.e. 0.5 of a percentage point from employees and 0.5 of a percentage point from employers and 1 percentage point in the case of self-employed persons.
Cyprus2010-Q1/2011-Q2Excise dutyIncreaseThe tax on fuel products was raised to EU minimum levels in 2010. The tax on tobacco was increased by 20 % for cigarettes and 30 % for loose tobacco in 2011 (0.2 % GDP).
Cyprus2011-Q1/2012-Q2Excise dutyIncreaseExcise duties on tobacco were increased by 20% for cigarettes and by 30% for loose tobacco in 2011 [0.2% of GDP].
Cyprus2012-Q1/2013-Q2Excise dutyChangeFrom 6 December 2012, the excise duty rate for cigarettes is calculated at 34 % of the higher retail selling price plus EUR 1.10 per package of 20 cigarettes (previously it was calculated at 40 % on the higher retail selling price plus EUR 0.80 per package of 20 cigarettes). In addition, the excise duty rate for the fine cut tobacco for rolling cigarettes and other smoking tobacco was increased from EUR 60 per kilogram to EUR 150 per kilogram. The excise duty rate for ethyl alcohol was increased from EUR 598.01 to EUR 956.82 per 100 litres of anhydrous ethyl alcohol and that for beer from EUR 4.78 to EUR 6.00 per 100 litres per degree of alcohol of final product. On 1 January 2013 the excise duty rate for petrol and gasoil used as motor fuel was increased from EUR 359 per 1 000 litres to EUR 429 per 1 000 litres and from EUR 330 per 1 000 litres to EUR 400 per 1 000 litres respectively. As from 2014, excise duties on energy, i.e. on oil products, will increase by EUR 0.05 by increasing the tax rate on motor fuels (petrol and gasoil).
Cyprus2010-Q1/2011-Q2Other taxIncreaseThe 2010 budget included measures to improve the public finances, targeting tax evasion in particular. VAT collection periods were shortened. From 2011, a bank levy was introduced. The levy is computed as 0.095 % of deposits held at banks on 31 December each year with a maximum of 20 % of the total taxable profits of the financial institution.
Cyprus2011-Q1/2012-Q2Other taxIncreaseIn line with the austerity package of August 2011, an annual levy of € 350 on registered companies was introduced. A bank levy was introduced only for two years in 2011. It is 0.095% of the deposits held in banks on 31 December 2010 and 2011, payable in four instalments in 2011 and 2012, with a maximum of 20% of the total taxable profits of the financial institution [0.4% of GDP]. Real estate tax rates were increased. They now range from 0% to 0.8%, depending on the property value (previously 0% to 0.4%) [0.1% of GDP].
Cyprus2012-Q1/2013-Q2Other taxChangeThe bank levy on deposits raised by banks and credit institutions in Cyprus will increase from 0.095 % to 0.11 % in 2013. An increase in the rate of Immovable Property Tax, which is part of the preliminary agreement between Cyprus and its international lenders, has been voted by the Parliament in May 2013.
Czech Republic2010-Q1/2011-Q2Personal income tax IncreaseThe lump-sum deductions that entrepreneurs can claim instead of actual expenses are reduced for certain categories of tax-payers from 60 % to 40 % of income.
Czech Republic2011-Q1/2012-Q2Personal income tax ChangeThe basic personal income tax credit was reduced for 2011 on account of the unexpected floods expenditure [0.1% of GDP]. In 2012, the tax allowance for families with children was increased [0.1% of GDP]. A comprehensive direct tax reform was adopted on 27 December 2011. It is planned to implement it in 2014. It introduces a personal income tax of 19% of the gross salary (instead of 15% of the 'supergross' salary) and replaces social and health insurance employers have to pay with a 32.5% payroll tax (currently 34% of the contribution base). The maximum amount of mortgage interest payments deductible for a main residence have been reduced from CZK 300000 to CZK 80000 per year. A temporary consolidation package approved by the government in April 2012 to respond to current consolidation needs due to the crisis contains tax measures that should remain in force only from 2013 to 2015. The main ones include removing the basic tax allowance for employees, introducing a temporary 7 pp additional PIT surcharge for high-income earners, limiting tax deductibles for the self-employed and a temporarily increasing in the PIT rate from 19% to 20%.
Czech Republic2010-Q1/2011-Q2Corporate income taxDecreaseIn accordance with the approved legislation there was a further gradual reduction in corporate income tax to 19 % in 2010.
Czech Republic2011-Q1/2012-Q2Corporate income taxIncreaseFrom January 2012, a new tax on lottery companies was introduced [0.1% of GDP]. Until then lottery companies had not had to pay corporate income tax. General CIT is now applicable to these companies and the revenue from the tax will be divided between the state budget and municipalities.
Czech Republic2010-Q1/2011-Q2Social security contributionIncreaseIn 2010, the social security contribution for high income earners was increased by raising the ceiling on the annual security contributions base to six times the average annual salary (the previous figure was 4 times).
Czech Republic2011-Q1/2012-Q2Social security contributionDecreaseContribution ceilings were reduced from six times to four times the average wage in 2011 [0.1% of GDP].
Czech Republic2011-Q1/2012-Q2Social security contributionIncreaseUnder the reform mentioned above, social security and health insurance contributions paid by employees and self-employed people will be taxed at 6.5% in each case. Currently, the rate for health insurance is 4.5%, while the rate for social security contributions is 6.5%.
Czech Republic2012-Q1/2013-Q2Social security contributionChangeSince the introduction of the flat rate, social security contributions have been fully taxable. From 1 January 2013, social security contribution rates vary depending on whether the taxpayer has opted for the new voluntary pension saving scheme. For employees who do not opt for the voluntary pension saving scheme, the total rate for social and health insurance is 11.0 % (6.5 % for contributions to pension insurance and 4.5 % for compulsory health insurance). For employees who opt for the voluntary pension saving scheme, the total rate of social and health insurance is 13.0 % (statutory pension insurance of 3.5 %, voluntary pension saving of 5 % and compulsory health insurance of 4.5 %). The total rate for employers’ contributions is 34 %; it will be replaced by a payroll tax of 32.4 % as of 2015. For the self-employed, the overall social security rates are 45 % and 47 % respectively depending on whether they opted for the new voluntary pension saving scheme or not. However, the contribution base for the self-employed is set at 50 % of their income tax base. In 2013, a separate ceiling set at four times the average annual salary, i.e. CZK 1 242 432 (EUR 49 083) applies to social security contributions. For the 2013–15 tax years, the ceiling on health insurance contributions (six times the average annual salary) has been abolished. From 2015, both employees and the self-employed will pay health insurance contributions at a rate of 6.5 % of the contribution base. In addition, the health insurance contribution base for the self-employed will be 100 % of their income tax base.
Czech Republic2010-Q1/2011-Q2VAT IncreaseThe VAT rates were increased by 1 percentage point from 1 January 2010 to 20 % for the standard rate and 10 % for the reduced rate.
Czech Republic2011-Q1/2012-Q2VAT IncreaseFrom 1 January 2012 the reduced VAT rate was increased from 10% to 14% [0.7% of GDP]. This rate will be in force for the fiscal year 2012. Under the temporary consolidation package, from 2013, a 1 pp increase will bring the standard rate to 21% and the reduced rate to 15%. The previous plan to set the two VAT rates at 17.5% was postponed to 2016.
Czech Republic2012-Q1/2013-Q2VAT Change In 2013, the VAT rate was increased again by one percentage point (until 2015 only). The basic VAT rate is thus currently set at 21 %, while the reduced rate was increased to 15 % in 2013. Unification of the VAT rates at 17.5 % is planned for 2016. Changes to the VAT rates are to cover the drop in revenues from social insurance in relation to the introduction of the second pension pillar.
Czech Republic2010-Q1/2011-Q2Excise duty IncreaseSeveral excise duties were increased slightly in 2010 (alcohol, tobacco products, mineral oils and fuels).
Czech Republic2011-Q1/2012-Q2Excise duty IncreaseExcise duties on tobacco were increased from 1 January 2012. Under the consolidation package, it is planned to introduce a carbon tax and a wine tax, to further increase excises on tobacco and to reduce the number of exemptions from excise duties on certain commodities.
Czech Republic2010-Q1/2011-Q2Other taxIncreaseThe property tax rate was doubled, including the tax on land and buildings; only taxes for buildings and non-residential spaces used for other business activity were unchanged.
Czech Republic2011-Q1/2012-Q2Other taxChangeAt the end of 2011 a bill created a one-stop-shop for all taxes, duties, and social security and health insurance contributions. This Integrated Revenue Agency for public revenue is being set up gradually. At first, a Czech Financial Office administered by the newly established General Financial Directorate was set up with effect from January 2011. From 2012, Regional Tax Directorates will be abolished, so that tax administration will consist of two layers (the Financial Directorate and local tax offices). From 2013, social and health insurance services, and from 2014 customs administration, which currently administers the collection of excises, will be integrated. The creation of the one-stop-shop for all taxes is accompanied by recent tax administration measures, such as a disciplinary fine of up to CZK 50000 for not fulfilling certain procedural duties and a fine for not filing a tax return on time. Measures against VAT fraud and evasion have also been adopted. They relate to optional provisions of the VAT Directive on suppliers' and customers' joint liability for VAT payments.
Czech Republic2012-Q1/2013-Q2Other taxChangeFrom 2013, the real estate transfer tax rate increased to 4 % of the price of the property. From 2015 the inheritance and gift tax rates will be replaced by flat 9.5 % and 19 % rates respectively and movable personal belongings and financial means will be exempt up to CZK 50 000 (EUR 1 975). The Czech authorities say that a single collection point for income taxes is expected to be established in 2015.
Denmark2010-Q1/2011-Q2Personal income taxDecreaseA major tax reform was introduced in 2010 (the Spring Package 2.0). Reduction of the rate of the bottom tax bracket from 5.26 % to 3.76 %, abolition of the medium tax bracket with the 6 % rate altogether, and increase in the top tax bracket threshold by DKK 28 800 (€ 3 860). The top tax threshold was to be further increased by DKK in 2011. The reform reduced the lowest marginal tax rate from 42.4 % to 41.0 % and the highest marginal tax rate from 63.0 % to 56.1 % (Overall by DKK 29 billion in 2010). To compensate for the increases in excise duties, a ‘green check’ of DKK 1 300 (€ 175) was introduced for everyone above 18 years and DKK 300 per child for up to two children. The nominally fixed ‘green check’ is being rapidly phased out for incomes above DKK 360 000 (€ 48 300). Broadening of the tax base is a main source of finance for the reform. The measures include a gradual reduction of the tax value during the period 2012 to 2019 from 33.5 % to 25.5 % of assessment oriented deductions and limitations of the tax deductibility of net interest payments over a nominal threshold of DKK 50 000 (DKK 100 000 for married couples). Also the deductibility of payments above DKK 100 000 a year to individual pension insurance schemes with less than lifelong coverage is limited, and the tax treatment of company cars and other fringe benefits have been tightened. As of 1 June 2011, Denmark has introduced a temporary deduction for wage expenses for household services and refurbishment.
Denmark2011-Q1/2012-Q2Personal income taxDecreaseFrom 1 June 2011, Denmark introduced a temporary deduction for wage expenses for household services and refurbishment. It will expire by the end of 2012.
Denmark2010-Q1/2011-Q2Personal income taxIncreaseA Fiscal Consolidation Agreement was reached in May 2010, including a number of tax measures from 2011: Suspension from 2011 to 2013 of automatic adjustments in various tax thresholds (including personal allowances). Postponement of the planned increase from the Spring Package 2.0 of the threshold for the top income tax rate from 2011 to 2014. The tax deductibility of labour union membership fees is limited to DKK 3 000 (€ 403) from 2011. The annual amount of total child allowance is limited to DKK 35 000 (€ 4 696) and child allowances will be gradually reduced by 5 % until 2013. Furthermore, a 6 % tax is imposed from 2011 on pension payments exceeding DKK 362 800 (part of the Spring Package).
Denmark2011-Q1/2012-Q2Personal income taxIncreaseFrom 2011, there is a 6% tax on payments from pension schemes exceeding DKK 362 800 (€ 48 370) (part of the 2010 Spring Package). A Fiscal Consolidation Agreement was reached in May 2010. It includes measures such as the suspension from 2011 to 2013 of automatic adjustments to various tax thresholds (including personal allowances), and the postponement from 2011 to 2014 of the planned increase in the threshold for the top income tax rate. The tax deductibility of trade union membership fees is limited to DKK 3 000 (€ 403) from 2011. Child allowances are gradually being reduced by 5% from 2011 to 2013. In the 2012 budget, the limit for deductible contributions to individual pension insurance schemes with less than lifelong coverage was decreased from DKK 100000 to 55 000 with effect from income year 2012 [0.08% of GDP in 2012; 1/5th of that in the long run]. The tax exemption for employer-paid health insurance is abolished as of 2012 [0.03% of GDP].
Denmark2012-Q1/2013-Q2Personal income taxChangeDenmark has made cuts in personal income taxation as part of the two most recent tax reforms in order to stimulate labour supply in the medium- to long-term. The first tax reform, the so-called Spring Package 2.0, was adopted in 2009 and the second was adopted in 2012. The 2012 tax reform is being phased in between 2013 and 2023. The tax reform includes raising the threshold for the top income tax rate gradually by DKK 57 900 (EUR 7 771) to DKK 467 000 (EUR 62 680) when fully implemented in 2022. The employment allowance will also rise steadily, by 5.05 percentage points, to 10.65 % in 2022, as will the maximum allowance, by DKK 16 200 (EUR 2 174), to DKK 34 100 (EUR 4 577). An extra employment allowance will be introduced for single parents in 2014, which will gradually increase to 6.25 % with a maximum of DKK 20 000 (EUR 2 684) in 2019. The tax cuts were only partly financed through the tax system e.g. by indexing certain excise duties. The main part was financed through cuts in public expenditure e.g. on defence and by lowering the annual adjustments of social transfers.
Denmark2011-Q1/2012-Q2Corporate income tax IncreaseFrom 2012, limitations to loss carry-forward were introduced. Losses can still be carried forward indefinitely, but may be set off against current year income only up to € 1 million without restriction. Amounts over € 1 million may be offset only by 60% of the remaining income (similar to the rules in Germany) [0.02% of GDP].
Denmark2012-Q1/2013-Q2Corporate income tax ChangeOn 27 June 2013, the parliament adopted a ‘Growth Package’ including a gradual reduction in the corporate tax rate by 1 percentage point per year from 25 % to 22 %, over the period 2014–16.
Denmark2010-Q1/2011-Q2VATIncreaseVAT exemptions removed for travel agencies, property management and the supply of buildings and building land (DKK 1.2 billion in 2011).
Denmark2011-Q1/2012-Q2VATIncreaseVAT exemptions were removed for travel agencies, property management and the supply of buildings and building land [0.07% of GDP in 2011].
Denmark2010-Q1/2011-Q2Excise duty IncreaseThe 2010-reform is partly financed by higher taxes on energy (15 % increase except for petrol and diesel) and transport and environmental taxes and also by increases of excise rates on health-related goods (fat, candy, sugary drinks, tobacco). (Overall DKK 8.7 billion (€ 1.2 billion) in 2011).
Denmark2011-Q1/2012-Q2Excise duty IncreaseIn February 2012 the government put forward a bill attempting to close a loophole in the car registration tax that gives leased cars preferential treatment and to reduce evasion by car dealers related to demonstration cars [0.05% of GDP].
Denmark2012-Q1/2013-Q2Excise duty ChangeAs part of the 2013 “Growth Package” the excise duty on beer is decreased 15 per cent by mid-2013 just as the excise duty on soft drinks gradually be abolished from that time.
Denmark2010-Q1/2011-Q2Other taxIncreaseAs of 2011, increase in FAT, a duty on wage and salary costs for businesses engaged in financial services, from effectively 9.13 % to 10.5 %.
Denmark2011-Q1/2012-Q2Other taxIncreaseIn 2012 the taxes/duties on unhealthy products such as sweets, soft and alcoholic drinks and cigarettes were increased. From 2011, financial activities tax (FAT) was increased from 9.13% to 10.5% (part of the 2010 Spring Package). FAT is a tax on wage and salary costs for businesses engaged in financial services.
Denmark2012-Q1/2013-Q2Other taxChangeAs part of the 2013 Budget the pay roll tax for lotteries, health benefits, labour unions, newspapers was raised with 1.04 percentage point, and to offset the decrease in the corporate tax rate in the 2013 “Growth Package” a gradual increase in the pay roll tax for the financial sector of 4.4 per cent points in 2021 was included. As part of the 2013“Growth package” energy taxes are lowered for companies – including decreases in companies' use of fuel and electricity for processes, decreases on energy used for processes was brought forward, abolition of the energy saving tax of electricity for industry according to the law of CO2-duty, and a decrease in the duty on electricity to the industry.
Estonia2010-Q1/2011-Q2Personal income taxIncreaseAdditional basic allowance for the first child and right to deduct trade union membership fees and interest on study loans in income taxation was abolished in 2010. The long-term plan to cut the income tax rate by 1 percentage point annually has been frozen. Also, the basic allowance will remain at EEK 27 000 (€ 1 726).
Estonia2012-Q1/2013-Q2Personal income taxIncreaseEstonia is lowering the ceiling for total personal income tax deductibility from EUR 3960 to EUR 1920 (0.03 % of GDP, impact in 2013).
Estonia2011-Q1/2012-Q2Personal income tax DecreaseAt the end of 2011, the Income Tax Act was amended abolishing the cap for the reimbursement of tax-free accommodation expenses from 1 January 2012. Previously, the reimbursement of accommodation expenses for business trips was exempt from tax up to € 77 for domestic trips and € 128 for foreign trips.
Estonia2012-Q1/2013-Q2Social security contributionIncreaseThe statutory minimum monthly salary was increased from EUR 290 to EUR 320 and the minimum hourly salary from EUR 1.80 to EUR 1.90, with effect from 1 January 2013. This increased the tax burden on sole proprietors who pay SSC on at least the amount equal to one minimum monthly salary up to an amount capped at 15 minimum monthly salaries.
Estonia2012-Q1/2013-Q2Social security contributionDecreaseWith effect from 1 January 2013, unemployment insurance contribution rates were reduced from 2.8 % to 2 % for employees and from 1.4 % to 1 % for employers.
Estonia2010-Q1/2011-Q2Excise dutyIncreaseIncrease in the excise duty on fuel, tobacco and alcohol by 5 – 64 % and the excise duty on electricity by 40 % (overall 0.8 % of GDP in 2010). In 2011, excise duty on tobacco was further increased by 10 %.
Estonia2011-Q1/2012-Q2Excise dutyIncreaseIn 2011 excises on tobacco were increased by 10% [0.1% of GDP] and in 2012 by 10% [0.1% of GDP]. The Estonian parliament increased the excise duty on alcohol by 5% from February 2012 [0.04% of GDP]. Tax benefits of using specially marked fuel in mining, building and forestry were abolished in 2012 [0.1% of GDP].
Estonia2012-Q1/2013-Q2Excise dutyIncreaseTax on beer, other fermented alcoholic products, wine, intermediate products and ethyl alcohol was increased by 5 %. The rate of excise duty on oil shale used for heating purposes is EUR 0.30 per gigajoule of the upper calorific value of oil shale. Tax rates were increased by 6 % on cigarettes and by approximately 10 % other tobacco products. These changes came into force on 1 January 2013.
Estonia2012-Q1/2013-Q2Excise dutyDecreaseThe land tax on residential land was abolished for plots up to 1500 m² in densely populated areas and up to 2 ha in rural areas (-0.1 % of GDP).
Finland2010-Q1/2011-Q2Personal income tax DecreaseThe income tax rate was reduced by 0.5 p.p. across the four income brackets in 2010. The employment income deduction as well as the basic allowance for the municipal taxation was increased in order to lower the tax burden for low-income earners. The taxation of pension income was reduced in parallel. Generally, the aim of these measures is to compensate for increased employee social security contributions, the impact of a higher income level due to progressivity and likely increases in the municipal tax rates.
Finland2011-Q1/2012-Q2Personal income tax DecreaseTax on earned income was slightly reduced in 2012. This was due to a 3.3% inflation adjustment to state income tax scales and a slight increase in the labour income tax credit. The basic income tax allowance was increased in municipal income taxation to ease the tax burden for low incomes. As a result, the top marginal tax rate fell by 0.25 pp and the earned income tax credit and tax allowances in state and municipal taxation increased [0.3% of GDP].
Finland2011-Q1/2012-Q2Personal income tax IncreaseFrom 2012 the tax rate on capital income was increased from 28% to 30% and to 32% for income exceeding € 50000. Tax deductibility of mortgage interest rate payments is gradually decreased by 2014, so that the share of deductible interest payments will decrease from 100% to 85% in 2012, to 80% in 2013 and to 75% in 2014. The threshold for tax-exempt dividends of non-listed companies was reduced from € 90000 to € 60000 from 2012. From 2012, the maximum amount of the tax credit for the cost of domestic help decreased from € 3 000 to € 2 000 per person per year. The creditable amount of labour costs decreased from 60% to 45%, including VAT that has been paid out, if the party that did the work was a tax-registered firm or an entrepreneur. The creditable amount of the total costs incurred for hiring a worker, including his wages and social costs, decreased from 30% to 15%.
Finland2012-Q1/2013-Q2Personal income tax ChangeIncome tax rates effectively increased, as the tax brackets will not be adjusted for inflation in 2013. Taxation of people on low incomes has been eased, however, by increasing the earned income allowance and the basic allowance in municipal income taxation. In addition, a new temporary top income tax bracket was added to the state income tax scale for 2013–15.
Finland2011-Q1/2012-Q2Corporate income tax DecreaseThe corporate income tax rate was decreased from 26% to 24.5% from 2012 [0.2% of GDP].
Finland2012-Q1/2013-Q2Corporate income tax ChangeIn 2014, certain new restrictions to deductibility of interest on intra-group loans will enter into force. In 2013, the government introduced several types of relief from corporate and capital income taxation to stimulate investments. The package comprises new tax relief for investment in R&D, an incentive to invest in start-ups and small enterprises and accelerated depreciation on investment in new industrial capital and buildings. The whole temporary stimulus package of tax incentives was intended to be applicable from 2013 to 2015. However, in connection to the recent government proposal to decrease the corporate income tax rate from 24,5 % to 20 % at the beginning of 2014, it was proposed that the R&D tax incentive and accelerated depreciation for new investments would expire already at the end of 2014. The tax incentive for investment in start-up and small enterprises will expire at the end of 2015, as originally proposed.
Finland2010-Q1/2011-Q2VATChangeAdjustments were made in the VAT system from 1 July 2010. The 12 % reduced rate of VAT for food was broadened to include restaurants. To finance this change, a general increase of the reduced VAT rates from 12 % to 13 % and from 8 % to 9 % for newspapers, books, medicines and labour-intensive services was introduced. The standard VAT rate was increased from 22 % to 23 % as of 2011.
Finland2011-Q1/2012-Q2VATIncreaseFrom 2012, the VAT rate on newspapers and magazine subscriptions was increased from 0% to 9% and the application of reduced VAT rates on labour-intensive services abolished.
Finland2012-Q1/2013-Q2VATChangeThe current three VAT rates rose by 1 percentage point.
Finland2010-Q1/2011-Q2Excise dutyIncreaseExcise duties on tobacco products were raised by 5-15 % in 2010. In 2011, the energy taxation has been restructured and increased. A tax on sweets and ice cream was introduced from 1 January 2011 at a rate of 0.75ct per kg. The existing tax on soft drinks was raised at the same time to 0.75ct (from 0.45ct) per litre. A minor shift in the green tax has been applied, as taxes on fuel used for heat and power production as well as the energy tax on electricity were raised to offset the loss of revenue due to the abolition of the national pension contribution in 2010. Car registration tax and annual vehicle taxes have been changed from 2011 to take the CO2 emissions of each vehicle into account.
Finland2011-Q1/2012-Q2Excise dutyIncreaseFrom January 2011 a tax on sweets and ice cream was introduced and the current tax on soft drinks was increased. The excise duty on heating fuels and electricity were increased and energy taxation was restructured to take the energy content, CO2-emissions and local emissions of energy products into account. From 2012 the excise duty rates on alcohol, tobacco, sweets, ice cream and soft drinks were increased. The tax rates on transport fuels will increase by 10% in 2012 and 2014, in addition to the previously agreed increase in the diesel rate, implemented in 2012 [0.2% of GDP]. The rates of vehicle taxes (registration tax and annual circulation tax) and the CO2 dependence of tax rates were also increased.
Finland2011-Q1/2012-Q2Other taxIncreaseFrom 2011 the waste tax was increased and the tax base was broadened to include private landfill sites.
Finland2012-Q1/2013-Q2Other taxChangeTaxation of large pensions and inheritance property transfer taxation was tightened in 2013. A temporary bank levy has been introduced.
France2010-Q1/2011-Q2Personal income taxIncreaseAs from January 2010, the overall amount of tax incentives (niches fiscales) that a taxpayer may obtain during a fiscal year for individual income tax purposes has been capped at the level of the household (foyer fiscal) at € 20 000 plus 8 % of the taxable income. From 1 January 2010, capital gains realised by individuals on the disposal of shares are fully subject to social security contributions at an overall rate of 12.1 %. On 20 January 2010, the government tabled an amending Finance Law 2010 before the French Parliament providing for a tax of 50 % on bonuses exceeding € 27 500 paid in 2009 by financial institutions to their traders. As from 2011, the highest marginal income tax rate was increased from 40 to 41 %; taxes on capital income and gains were also raised by one point.
France2011-Q1/2012-Q2Personal income taxIncreaseThe 2011 Finance Law increased the top PIT rate from 40% to 41%. The allowance that reduces the amount of employment income subject to the generalized social contribution (CSG) and the social security deficit contribution (CRDS) was reduced from 3% to 1.75% from January 2012. From January 2012, the overall amount of tax incentives (niches fiscales) that a taxpayer may obtain during a fiscal year for individual income tax purposes was further capped for households (foyer fiscal) at € 18 000 (2011: € 18 000; 2010: € 20000) plus 4% (2011: 6%; 2010: 8%) of net taxable income. Many tax credits, including the deductibility of mortgage interest payments, were abolished or reduced as part of a government plan to reduce the budget deficit. From January 2011, the optional levy on dividends and interests was increased from 18% to 19%, and the mandatory final levy on capital gains was increased from 18% to 19%. From January 2012, the optional final levy on dividends was increased from 19% to 21% , and the optional levy on interest was increased from 19% to 24%.The tax shield will be fully abolished in 2013. From 2012, a temporary progressive contribution on top incomes (more than 250000€ a year) was introduced. From August 2012, the exemption of personal income tax and the reduction in social contributions for overtime earnings was abolished. However, the reduction in employers’ social contributions for overtime was maintained for small companies (less than 20 employees).
France2012-Q1/2013-Q2Personal income taxChangeThe 2013 Finance Laws have created a new income tax bracket of 45 % and frozen the tax brackets. From 2013, dividends and interest will be taxed according to a progressive scale. From 2013, capital gains will taxed according to the progressive scale, after tax deductions depending on the length of the holding period.The overall amount of tax incentives (niches fiscales) that a taxpayer may obtain during a fiscal year for individual income tax purposes has been further capped at household level (foyer fiscal) to EUR 10 000 (2011: EUR 18 000 plus 4 % of the net taxable income). Many tax credits were abolished or reduced as part of a government plan to reduce the budget deficit, e.g. the family quotient and the overtime wage exemption.
France2010-Q1/2011-Q2Corporate income tax ChangeSince 1 January 2010, the local business tax (taxe professionnelle) levied on firms to finance local governments has been replaced by a new ‘economic territorial contribution’ (contribution économique territoriale). The tax is no longer based on the annual value of commercial and industrial equipment, but on the annual rental value of immovable property (cotisation locale d’activité). The tax also consists of a new tax of 1.5 % on the added value of the business applicable to taxpayers with a turnover exceeding € 152 500 and allowances depending on the amount of the turnover (cotisation complémentaire). In addition, a special tax on the capital stock of network industries was introduced. Overall reduction in tax burden by 0.5 % of GDP in 2010 and by 0.2 % thereafter. Since 2009, under certain conditions, capital invested in SMEs gives rise to a tax credit of 25 % for individual income tax purposes. This favourable regime is extended by the Finance Law 2010.
France2011-Q1/2012-Q2Corporate income tax IncreaseA temporary CIT surcharge of 5% on companies with (group) gross income over € 250 million was introduced in 2012. In 2011, the carry-back of losses was reduced from three years to one and the carry-forward of losses limited to 60% over € 1 million of taxable profits. The R&D reimbursable tax credit (credit d’impôt recherche) has been reduced. The worldwide tax consolidation regime was abolished. An additional contribution of 3% on distributed earnings was introduced in 2012.
France2012-Q1/2013-Q2Corporate income tax ChangeThe main initiative in corporate taxation is the introduction of a tax credit (credit impôt pour la compétitivité et l’emploi). From 2014, it will rise to 6 % ( from 4 % in 2013) of the payroll for employees with wages below 2.5 times the minimum monthly wage. Funds for this measure will be made available through a cut in public spending and an increase in VAT and environmental taxes. The business deduction of loan interest above EUR 3 000 000 was limited to 85 % of net interest charges for 2012 and 2013 fiscal years. From 2014, this deduction will be reduced to 75 %.
France2010-Q1/2011-Q2VATIncreaseAs from 1 January 2011 the standard rate is applied on the so-called ‘triple play’ services (€ 1.1 billion). The reduced VAT on air conditioning equipment was abolished with effect from 1 January 2010.
France2011-Q1/2012-Q2VATIncreaseFrom 2012, a new reduced rate of 7% was introduced. It covers all products and services previously taxed at 5.5% (including restaurants), bar those for disabled people, food and gas and electricity subscriptions . these are still taxed at 5.5%.
France2012-Q1/2013-Q2VATChangeThe standard and reduced VAT rates are to be increased from 19.6 % and 7 % (renovation of private dwellings, transport services, hotel accommodation, restaurant services, television, cinemas, theme parks etc.) to 20 % and 10 % by January 2014. The reduced rate applied to foodstuffs, equipment for the disabled, books, concerts, theatres and some shows (5.5 %) will be decreased by half a percentage point to 5 %.
France2011-Q1/2012-Q2Excise dutyIncreaseA specific contribution of € 7.16 per hectolitre was introduced for suppliers of beverages (sodas) with added sugar or sweeteners. The tax base for spirits was broadened and the tax schedule revised, leading to a 10% price increase.
France2010-Q1/2011-Q2Excise dutyIncreaseAs of 2011, regions have been offered the possibility to raise the diesel fuel tax (TIPP) up to 1.35 euro per hectolitre (instead of 1.15 previously), with the new resources being dedicated to financing sustainable transport infrastructures. 17 out of 22 regions have increased the diesel fuel tax up to the new ceiling.
France2011-Q1/2012-Q2Social security contributionIncreaseFrom July 2012 the overall rate of social taxes (i.e. social levies, CSG and CRDS) applicable to passive income will be increased to 15.5% (from the current 13.5%). This is due to the increase in the social contribution from 3.4% to 5.4% for certain types of income (prélèvement social sur les revenus du patrimoine et produits de placement).
France2012-Q1/2013-Q2Excise dutyChangeExcises on beer were increased as of 2013.
France2010-Q1/2011-Q2Other taxIncreaseA bank levy of 0.25 % of the minimum capital required under French regulatory rules, as computed on the basis of risk-weighted assets, was introduced as of 2011 (€ 500 million in 2011). On average, local governments have increased housing taxes (taxe d’habitation and taxe foncière).
France2011-Q1/2012-Q2Other taxIncreaseFrance also announced the introduction of a Financial Transaction Tax with effect from August 2012. Its rate will be 0.2% on the transaction of shares of publicly traded resident companies whose capital exceeds € 1 billion and 0.01% on high frequency and automated trading and on 'naked' credit default swaps for European sovereign debt. From January 2012, a temporary contribution on wealth was also introduced doubling current revenue from tax on wealth (the so called “impôt sur la fortune (ISF)”). In 2012, the allowance for descendants in the direct line that reduces taxation on inheritance and gifts was reduced from € 150000 to € 100000. The time allowed to lapse between two exempt gifts was increased from 10 years (6 years in 2010) to 15 years in 2012.
France2012-Q1/2013-Q2Other taxChangeFrance has introduced a financial transaction tax effective since August 2012. It applies to acquisitions of equity securities (0.1 %), to high frequency trading (0.01 % of the value of orders cancelled or amended) and to acquisitions of Credit Default Swaps on EU sovereign debt (0.01 % of the notional amount of the CDS).
Germany2010-Q1/2011-Q2Personal income taxDecreaseFollowing the reduction in the lowest personal income tax rate from 15 % to 14 % in 2009, the personal income tax allowance and thresholds were increased for a second time as of 1 January 2010 (following the 2009 increase). The tax allowance for children was also increased for a second consecutive time (to € 7 008 as of 2010, from € 6 024 in 2009, previously € 5 808). Since 2010, the deductibility of payments for health and nursing care insurance has been improved. These costs are now fully deductible (0.4 % of GDP).
Germany2011-Q1/2012-Q2Personal income taxDecreaseTax simplification measures that took effects on 1 January 2012 include better deductibility of child care costs and an increase in the employee allowance (Arbeitnehmer-Pauschbetrag) from €920 to €1,000 [0.022% of GDP].
Germany2012-Q1/2013-Q2Personal income taxChangeThe burden on labour was further reduced with an increase in the basic PIT allowance in February 2013. The change comes into force retroactively, raising the allowance as of 1 January 2013 from EUR 8 004 to EUR 8 130 and from EUR 8 130 to EUR 8 354 as of 1 January 2014. Moreover, German authorities announced an evaluation of family and marriage benefits in 2013.
Germany2010-Q1/2011-Q2Corporate income tax DecreaseThe application of the so-called interest barrier rule (Zinsschranke) was relaxed (the interest barrier rule sets a profit-based limit on the deduction of interest expenses if net interest expenses exceed a certain ceiling; the ceiling was raised from € 1 million to € 3 million). The depreciation allowance for low-value assets was improved in 2010.
Germany2012-Q1/2013-Q2Corporate income tax ChangeDividends from shareholdings that amount to less than 10 % (at the beginning of the calendar year) and accrued after 28 February 2013 are no longer exempt. Simplifications in the system of group taxation were also implemented in February 2013.
Germany2011-Q1/2012-Q2Social security contributionDecreaseAt the end of 2011, the German government decreased the pension insurance contribution from 19.9% to 19.6% with effect from 1 January 2012.
Germany2012-Q1/2013-Q2Social security contributionChangeAs of 2013, social contributions (SSC) for pension insurance fell from 19.6 % to 18.9 %. In addition, the contribution to insurance for disability and old age (Pflegeversicherung) is increased from 1.95 % to 2.05 % with effect from 1 January 2013.
Germany2010-Q1/2011-Q2VATDecreaseThe reduced 7 % VAT rate is now also applied to short-term accommodation.
Germany2010-Q1/2011-Q2Excise dutyIncreaseA tax on nuclear fuel (Kernbrennstoffsteuergesetz) is introduced as of 2011 (annual tax revenues of € 2.3 billion over the period 2011-2016). Introduction of a duty on all airline tickets booked after 1 September 2010 levied for flights departing from Germany. Rates depend on the flight distance (€ 8 for short distance flights, € 25 for medium distance flights and € 45 for long distance flights).
Germany2011-Q1/2012-Q2Excise dutyIncreaseA tax on nuclear fuel (Kernbrennstoffsteuergesetz) was introduced from 2011. The supplementary Budget Bill 2011 introduced from 2011 a duty on all airline tickets booked after 1 September 2010 for flights departing from Germany. The rates depend on the flight distance (€ 8 for short-distance flights, € 25 for medium- distance flights and € 45 for long- distance flights).
Greece2010-Q1/2011-Q2Personal income taxIncreaseIntroduction of a new unified progressive taxation scheme with nine brackets (instead of four) in 2010, with a 45 % top rate (above € 100 000, replacing previous 40 % top rate. The differential treatment of sources other than employment income and pensions was eliminated. The tax increases gradually from € 1 000 to € 25 000 for income above € 900 000. Bonuses to business executives in the financial sector were subject to a special progressive levy in 2010 (between 20 % and 90 %). In 2010, a 1 % extraordinary one-time contribution was applied on the income of individuals above € 100 000 for 2009. The tax treatment of company cars was changed so that the use and maintenance of company cars with an ex-factory value of above € 17 000 is taxed as salary income. Greece also introduced ‘presumptive taxation’. This means that, depending on the ownership of certain ‘luxury’ goods (major houses, cars, leisure boats, private planes etc.), a minimum taxable amount is determined by the tax authorities according to certain objective criteria. The taxable person can challenge this ‘presumption’ in certain cases (e.g. unemployment).
Greece2011-Q1/2012-Q2Personal income taxIncreaseA new solidarity contribution was introduced for individuals in July 2011. It applies to income earned from 2010 to 2014. The rates range from 1% for income above € 12 000 to 4% for income above € 100000. The rate for high-ranking state officers is 5%. The maximum PIT exemption was reduced from € 12 000 to € 8 000 in July 2011, and to € 5 000 in October 2011 (applicable since January 2011). The number of tax brackets was also reduced from 9 to 8. Law 4024, enacted in October 2011, amended the provisions of the Income Tax Code on tax credits. Tax credits are still granted for medical expenses, home rent, annual educational expenses, the conversion or installation of environmentally friendly heating systems and other environmentally friendly interventions in buildings, for the annual mortgage interest on the taxpayer's principal home and for life insurance premiums. The ceiling was reduced from 20% to 10% of the cost, subject to certain thresholds depending on the type of cost. The new system also applies to social security contributions, previously fully deductible.
Greece2012-Q1/2013-Q2Personal income taxChangeIn January 2013, as part of a comprehensive tax reform to be completed by July 2013, the old PIT system with eight tax brackets (rates: 10 %–45 %), which treated all PIT categories the same (employees, pensioners, self-employed, rental income), was replaced. The new system has three tax brackets with tax rates from 22 % to 42 % (applicable above EUR 42 000) for employment income consisting of salaries and pensions On top of the headline rate, a solidarity contribution is applied. Bonuses paid to executives of credit institutions above certain thresholds are taxed at higher rates, up to 90 %. The withholding tax rate on board of directors’ members’ fees was increased from 35 % to 40 %. Income earned by professionals and entrepreneurs is taxed at 26 % up to EUR 50 000 and at 33 % for the excess. Real estate rental income and income from securities is subject to 10 % tax up to EUR 12 000 and 33 % on the excess. The latest amendments replace the tax-free bracket with a system of tax deductions. Specifically, for income up to EUR 21 000, the tax deduction is EUR 2 100 if the taxpayer submits receipts for goods and services for at least 25 % of declared income. If the tax due is less than this, the tax deduction is reduced to the amount of the tax liability. For income above EUR 21 000, the tax deduction is reduced by EUR 100 for each EUR 1 000 of income. The new Law 4110/2013 abolished significant tax reliefs e.g. on the principal home rental rate, educational expenses, mortgage interest and life or medical insurance premiums and those types of relief still granted are subject to specific conditions. The same Law reintroduces a 20 % tax on capital gains. The income tax rate on interest from saving accounts was increased from 10 % to 15 %.
Greece2010-Q1/2011-Q2Corporate income tax DecreaseThe statutory corporate income tax rate was reduced from 25 % applicable to income earned in 2009, to 24 % applicable to income earned in 2010. In March 2011, a new tax law reduced the CIT rate to 20 % for income earned in 2011 and later years. Profits distributed by corporations, limited liability companies and cooperatives will be subject to a withholding tax rate of 25 % as of the financial year 2012 (for profits distributed in 2011 and later years). A 21 % withholding tax was applied to profits distributed in 2010 in the financial year 2011. If the beneficiary of the respective income is a natural person subject to a lower tax rate for his/her taxable income, the dividends shall be taxed according to the general provisions and the credited balance shall be reimbursed. Otherwise, the tax liability shall be exhausted with the withholding tax. The split system of retained and distributed profits introduced in April 2010 was abandoned in March 2011.
Greece2011-Q1/2012-Q2Corporate income tax DecreaseThe tax law of March 2011 reduced the CIT rate to 20% for income earned in 2011 and abandoned the split system introduced in 2010 for retained and distributed profits.
Greece2010-Q1/2011-Q2Corporate income tax IncreaseA special, one-time contribution was imposed at progressive rates on all enterprises, except sole proprietorships, whose net income for the fiscal year 2010 exceeds € 100 000. The application was recently extended up to 2014. The rate for partnerships was increased from 20 % to 25 %.
Greece2011-Q1/2012-Q2Corporate income tax IncreaseThe extra contribution charged on large profitable corporations (at progressive rates, initially, of 5, 7 and 10% and since 2010, for income earned in 2009, at progressive rates of 4, 6, 8 and 10%) was previously extended until 2014. From 2012, a 25% withholding tax is levied on profits distributed by corporations, limited liability companies and cooperatives; for the year 2011 the withholding tax rate was 21%.
Greece2012-Q1/2013-Q2Corporate income tax DecreaseThe extra contribution charged on large profitable corporations (at progressive rates, since 2010, of 4, 6, 8 and 10 %), which had been previously extended until 2014, was not extended by the law of January 2013. Under Law 4110/2013, the withholding tax rate on dividend distributions and profit capitalisations acquired in 2013 and approved as of 1 January 2014 onwards will be reduced from 25 to 10 % and the 10 % tax exhausts any further liability.
Greece2012-Q1/2013-Q2Corporate income tax IncreaseA 25 % withholding tax is levied as from 2012 on profits distributed by corporations, limited liability companies and cooperatives; for 2011, the withholding tax rate was 21 %. The Law of January 2013 raised the CIT rate to 26 % for income earned as of 1 January 2013 after this had been reduced to 20 % in March 2011. It also aligned the tax regime for corporations with that for partnerships, civil societies, civil partnerships and joint ventures that keep double-entry accounts. Partnerships and other entities which maintain single-entry books are now taxed at a 26 % tax rate for income up to EUR 50 000 and 33 % for the excess (similarly to the self-employed). The entrepreneurial fee is abolished. The special tax regime for banking and insurance companies was abolished and their profits are now taxed according to the general provisions. New transfer pricing provisions have been introduced with the new law applying to all intercompany transactions.
Greece2011-Q1/2012-Q2VATDecreaseFrom 1 January 2011 the reduced rate on hotels, medicines and picture books for children was decreased from 13% to 6.5%.
Greece2010-Q1/2011-Q2VATIncreaseVAT rates were subject to several increases. The standard VAT rate was raised from 19 % to 21 % and subsequently to 23 %. The reduced rate and the former super-reduced rate went up in three steps from 9 % to 13 % and from 4.5 to 6.5 % respectively. Changes in the application of the rates to different commodities were implemented with a view to broadening the tax base. Moreover, VAT exemptions of several categories of professionals were repealed. A special tax on luxury goods was introduced in 2010.
Greece2011-Q1/2012-Q2VATIncreaseFrom January 2011, reduced VAT rates were set at 13% (up from 11%) and 6.5% (up from 5.5%). The VAT rate on non-alcoholic drinks and restaurant services was increased from 13% to 23% from September 2011. The VAT exemption on the supply of water by public bodies was abolished on 22 August 2011.
Greece2012-Q1/2013-Q2VATChangeExcise duties on cigarettes, alcohol and fuel have been increased repeatedly. In 2013, the flat VAT tax refund rate applied to farmers subject to special scheme under the provisions of Article 41(1) of Law 2859/2000 was reduced from 11 % to 6 %. For all professional leases of immovable property, the option to join VAT is granted from 1 January 2013.
Greece2010-Q1/2011-Q2Excise dutyIncreaseThe road tax on motor vehicles was increased (to up to € 300), calculated on the basis of the engine capacity and the environmental impact. An additional road tax (ranging from € 350 to € 650) is collected on high capacity private vehicles and motorcycles. Taxes on mobile telephones as well as excise duties on fuel were increased, and excise duties on electricity were introduced. Excise duties on cigarettes and alcohol were also raised.
Greece2011-Q1/2012-Q2Excise dutyIncreaseAn excise duty was introduced on electricity in January 2011 and on natural gas in September 2011.
Greece2011-Q1/2012-Q2Social security contributionIncreaseWith effect from August 2011, social security contributions were increased by 0.5% both for employers and employees, paid to the unemployment fund of the Workforce Employment Organisation. This change brought the contribution rate to 16.5% for white-collar workers and to 19.5% for blue-collar workers.
Greece2012-Q1/2013-Q2Social security contributionChangeThe monthly SSC ceiling for employees who started working before 1/1/1993 was increased from EUR 2432.25 to EUR 5543.55 and was equalised with those who started working thereafter.
Greece2010-Q1/2011-Q2Other taxIncreaseGreece reintroduced a progressive tax on large property to replace the previous flat-rate tax of 1 %. Rates range from 0.1 % to 1 % for individuals, whereas for legal entities a 0.6 % flat rate applies. The 1 % top rate applicable above € 800 000 was increased to 2 % for property values above € 5 million for a period of three years. As a base broadening measure, church property not used for religious, education and charitable purposes is now included in the base. A special levy on high-value real estate was raised. The progressivity of the taxation of inheritances, gifts and parental provisions was increased. The new system has four brackets, ranging from 0 % to 10 % (above € 600 000) for close relatives and from 0 % to 20 % (above € 300 000) for other relatives. Greece has recently implemented a series of measures to increase tax compliance. Among others, criminal penalties were increased, the bank secrecy was lifted for high overdue debts to the state, a high-level tax evasion committee was established, a public prosecutor of economic crime introduced, a new tax arbitrage regime was provided for big tax cases and tax audits were restructured. In order to reduce tax evasion, particularly in the area of VAT, new rules for the issuing of invoices in electronic form were adopted. Payments above € 1 500 have to be made via the banks.
Greece2011-Q1/2012-Q2Other taxIncreaseIn September 2011 a special real estate duty on residential property was introduced. It is calculated in terms of the surface area of buildings, taking into account also their age and location. It is collected through the payment of electricity bills. Since 2011, the tax-free bracket of the progressive real estate tax introduced in 2010 is reduced from € 400000 to 200000. Until 2012 inclusive, real estate worth more than € 5 million is subject to tax at the rate of 2% (rather than the 1% rate applicable above € 800000). Several measures of the comprehensive reform plan to combat tax evasion were implemented, such as merging smaller tax offices and consolidating key functions, introducing performance-based contracts for auditors and establishing a 'large taxpayer' unit.
Greece2012-Q1/2013-Q2Other taxChangeThe government’s comprehensive tax reform to be completed by July 2013 aimed at simplifying the tax system, enhancing its growth-friendliness and improving voluntary tax compliance. The reform package includes simplifying the main tax codes and the VAT and property tax rate structures, eliminating a number of tax exemptions and preferential regimes under corporate income tax and VAT, and more uniform treatment of individual capital income.
Hungary2010-Q1/2011-Q2Personal income taxDecreaseAs part of the 2009/10 tax reform, income tax rates were reduced and thresholds increased across the board. The additional solidarity tax of 4 % on the highest income bracket was abolished. The tax base was broadened by the abolition of allowances. A flat personal income tax of 16 % was introduced in January 2011, applicable to income from wages, rental and capital. The inclusion of the employer’s social security contribution in the tax base will remain in 2011, but it will be reduced by half in 2012 and phased out completely by 2013. The income thresholds for the employment tax credit will be reduced in 2011. Substantial tax credits for families with children have also been introduced; these are particularly favourable for families with 3 or more children (HUF 1 000/child/month for 1-2 children, families with 3 or more HUF 33 000/child/month). (Overall -1.8 % of GDP in 2011).
Hungary2011-Q1/2012-Q2Personal income taxDecreaseA flat personal income tax rate of 16% was introduced in January 2011 [1.8% of GDP]. It means that one tax rate applies to income from wages, rent and capital. In 2011, as in 2010, employers' SSC were still fully included in the tax base, so that the tax base amounts to 127% of the gross wage and the effective tax rate is 20.3%. Also in 2011, the amount of the employment tax credit, benefiting low to medium earners, was reduced by 20% and the income threshold for its application was increased. Substantial tax credits for families with children were also introduced. They are particularly favourable for families with three or more children (HUF 10000 per child per month for one to two children, HUF 33000 per child per month for three or more, with no negative tax possible) [overall, 1.8% of GDP].With effect from 2012, the tax base of tax payers earning less than HUF 202 000 (€ 653) does not include the employers' social security contributions. The result is a two rate system with rates of 16% and 20.3%. The family tax credit introduced in 2011 was maintained in 2012.
Hungary2011-Q1/2012-Q2Personal income taxIncreaseFrom 2012 the employment tax credit was fully phased out, leading to a net tax increase to low earners with no children.
Hungary2012-Q1/2013-Q2Personal income taxChangeIn 2011, the progressive PIT system was replaced by a 16 % single rate system. However, an ordinary tax credit for low to average incomes was still applied in 2011, and in both 2011 and 2012 a tax-base-increasing component (super-grossing) was in force. From 2013, Hungary has a truly flat rate of PIT with the 16 % rate. The only major feature which deflects PIT from this single rate is a family tax allowance, introduced in 2011, which is especially generous towards families with at least three children; this is fully exploitable by higher earners.
Hungary2010-Q1/2011-Q2Corporate income tax DecreaseIn 2010, an increase in the rate from 16 % to 19 % was accompanied by a broadening of the tax base. A lower rate of 10 % was introduced as being generally applicable up to HUF 250 million of the tax base, and thereafter it is 19 %. The solidarity tax of 4 % was simultaneously abolished, which actually reduced the overall rate by 1 percentage point. From 2011-13, a flat rate also applies to corporate income. In 2011, the threshold for the 10 % lower rate is doubled to HUF 500 million. As of 2013, a flat rate of 10 % will be levied on the entire tax base. Moreover, the taxes on certain economic sectors will be deductible from the corporate income tax base. The overall total gross revenue impact is estimated at -0.7 % of GDP.
Hungary2011-Q1/2012-Q2Corporate income tax DecreaseIn 2011, the threshold for the lower 10% rate was increased tenfold to HUF 500 million (€ 1.8 million). Accordingly, in 2013 the reduced rate will be 10% and the regular rate 19%. The introduction of a higher 30% rate applicable only to energy and utilities companies was announced. The sectoral surcharges will be phased out (only halved for banks). [0.7% of GDP].
Hungary2012-Q1/2013-Q2Corporate income tax ChangeAs of January 2013, in addition to the EVA (simplified enterprise tax) small businesses will be able choose from two more optional tax schemes: the KATA and KIVA. Under the KATA (small taxpayers’ itemised lump sum tax) scheme, microbusinesses will pay a fixed HUF 50 000 (EUR 179) per month (half of this if the taxpayer is employed part-time) in place of the main taxes on profits and payroll. The KIVA (small business tax) will be an option for businesses with 25 or less employees and annual revenue of below HUF 500 million (EUR 1.79 million). Under this scheme, the business will pay a flat 16 % on its cash-flow based profits and payroll. Moreover, under the ‘Job Protection Act’ the Hungarian authorities reduced social security contribution rates as of 2013 for targeted groups, including the low skilled, the young and the old people.
Hungary2011-Q1/2012-Q2Corporate income tax IncreaseIn 2012, the simplified corporate income tax rate was increased to 37% (from 30%). The eligibility threshold was increased to HUF 30 million (€ 97 000) of annual turnover (from HUF 25 million).
Hungary2010-Q1/2011-Q2Social security contributionDecreaseAs part of the 2009/10 tax reform the employers’ social security contributions were reduced by 5 percentage points and the employee’s flat rate health contribution was abolished.
Hungary2011-Q1/2012-Q2Social security contributionIncreaseIn 2012 the health care contribution was increased to 7% (from 6%). This led to an increase in employees total SSC from 17.5% to 18.5% [0.45% of GDP].
Hungary2012-Q1/2013-Q2Social security contributionChangeAs of 2012, the employers’ contribution rate is 28.5 %, consisting of a vocational training contribution (1.5 %), a pension contribution, a health insurance contribution and contribution to the unemployment fund. The latter three amount to 27 % and were collectively renamed ‘social contribution tax’ in 2012. Employees’ contributions are composed of a 10 % pension contribution, a 7 % health care contribution and a 1.5 % unemployment fund contribution. The base of the pension contribution was capped at HUF 7.94 million (EUR 28 400) yearly until 2012 but this cap was removed in 2013. Under the ‘Job Protection Act’, in force as of 2013, the social contribution tax and vocational training contribution up to a gross wage of HUF 100 000/month is halved or fully removed for targeted labour groups: below 25 years; above 55 years; ‘elementary occupations’ (requiring basic skills); former long-term unemployed, women returning from maternity leave and career starters. From August 2013, a 6 % health-care contribution is planned to be applied to interest income (effectively increasing the tax rate from 16 % to 22 %).
Hungary2010-Q1/2011-Q2VATIncreaseThe reduction of taxes on labour in 2009/10 was financed primarily through an increase in the statutory VAT rate from 20 % to 25 %. Simultaneously, a new reduced VAT rate of 18 % was introduced for dairy and bakery products, which was later extended to district heating and accommodation services.
Hungary2011-Q1/2012-Q2VATIncreaseFrom 1 January 2012 the standard VAT rate was increased from 25% to 27% [0.5% of GDP].
Hungary2010-Q1/2011-Q2Excise dutyIncreaseExcise duties on motor fuels, alcohol and tobacco were also raised in January 2010 (by between 7.5 % and 10 %), following the July 2009 increase (by 5 % to 7 %).
Hungary2011-Q1/2012-Q2Excise dutyIncreaseAlcohol, tobacco and fuel excise duties were increased in 2012.
Hungary2012-Q1/2013-Q2Excise dutyChangeBetween 2009 and 2013, excise duties on tobacco, alcohol and fuel were increased in several steps.
Hungary2010-Q1/2011-Q2Other taxIncreaseSeveral levies on major sectors of the economy have been introduced to finance the 2011 reform. A levy on financial institutions was introduced in June 2010, retroactive from January. The modified balance sheet comprises the tax base of credit institutions, and a progressive tax rate of 0.15 % is applied up to 50 billion HUF; thereafter the rate is 0.5 % on the excessive amount. Insurance companies are taxed on their premiums at a rate of 6.2 %. Various rules apply to the other different types of institutions in the financial sector. The gross revenue of this tax is estimated to correspond to 0.7 % of GDP. In October 2010, this tax was accompanied by the introduction of additional levies on the retail, telecoms and energy sectors (0.6 % GDP). The tax base is the company’s net revenue from the listed activities. Progressive rates are applied for the retail and telecom sectors, while the tax on energy suppliers is a flat rate of 1.05 %. The total gross fiscal impact of these measures, including the extraordinary levy on financial institutions, amounts to 1.3 % of GDP. According to the adopted law, most of these taxes are to be phased out from 2013. In addition, a special temporary tax on energy suppliers introduced in 2009 for a two-year period, i.e. the 8 % on pre-tax profits, has now also been prolonged. As an additional means of funding, the government has also decided to allocate the full social security contribution revenue to the state budget during the next 14 months. Private pension fund members are also provided with strong incentives to transfer their funds back to the public pension fund.
Hungary2011-Q1/2012-Q2Other taxIncreaseA "cultural tax" on pornographic material was introduced on 1 January 2012. A new tax on unhealthy packaged food came into force in September 2011. A levy on phone usage was introduced with effect from July 2012. It amounts to HUF 2 per minute of call or sms [0.1% of GDP]. The introduction of a financial transaction tax in 2013 was announced. Measures to fight tax evasion have been implemented. They include allowing unannounced audits and increasing penalties.
Hungary2012-Q1/2013-Q2Other taxChangeIn 2013, a financial transaction duty was introduced on all cash and bank transfer transactions at a rate of 0.2 % (for cash withdrawal, 0.3 %), subject to a cap of HUF 6000 (EUR 20). In August 2013, the rate was increased to 0.3 % (for cash withdrawal, 0.6 %) and the cap was abolished in the case of cash withdrawal. In the insurance sector, a consumption-type tax amounting to 10 % of non-life insurance premiums (for car insurance, 15 %) was introduced in 2013. The taxpayer is the insurer. Since July 2012, a telecommunications tax of HUF 2 (EUR 0.0068) per minute of phone call and per text message (SMS) applies, which is planned to be increased to HUF 3 for companies as of August 2013. Additionally, from 2013, pipelines and other utility networks are subject to an extra tax. The government rules out the introduction of a centrally administered value-based property tax. In 2013, the two-step acquisition duty on real estate will be replaced by a uniform duty set at 4 %. As of August 2013, the mining tax is planned to be increased by one third.
Ireland2010-Q1/2011-Q2Personal income taxIncreaseThe biggest contribution to the consolidation in 2011 in terms of revenue comes from income tax with more than € 1.2 billion, mainly through the reduction of tax credits (€ 435 million) and changes in the rate band (€ 395 million).
Ireland2011-Q1/2012-Q2Personal income taxIncreaseIncome tax measures contributed around € 1 billion to fiscal consolidation in 2011 mainly through the reduction of tax credits (€ 435 million) and changes in the rate band (€ 395 million). From 2012 the taxes on capital and interest earned are aligned at 30%, in particular tha capital acquisitions tax and the capital gains tax were increased were increased from 25% to 30%, and the deposit interest retention tax (DIRT) from 27% to 30%. For certain windfall gains the windfall gains tax rate is 80%.
Ireland2011-Q1/2012-Q2Personal income taxDecreaseUnder the Finance Bill 2012, it is planned to increase the lower exemption threshold of the Universal Social Charge, exempting around 330000 people, and the mortage interest relief for first-time buyers during the property boom of 2004-2008. The same Bill also plans to create tax incentives to attract key employees that are currently foreign-based. Under the Special Assignee Relief Programme (SARP) individuals from abroad who are eligible can receive an exemption from income tax on 30% of their annual salary between €75 000 and €500000 if they are assigned for a minimum of one year to a maximum of five years. Furthermore, a deduction for foreign earnings (FED) is granted for employees assigned from Ireland to work in certain emerging market countries in order to increase trade with those countries. In addition, it is also planned to amend the Research and Development Tax Credit, where the first € 100000 expenditure will be allowable on a volume basis.
Ireland2012-Q1/2013-Q2Personal income taxChangeWith the Finance Act 2013, modest rate increases were applied to capital gains, capital acquisitions and interest earned on savings and investment products. Personal taxes on labour increased via social insurance measures to eliminate employee weekly allowances, increase the minimum annual contribution for self-assessed individuals and extend the scope of the charge.
Ireland2012-Q1/2013-Q2Corporate income taxChangeNo changes were made to the 12.5 % corporation tax rate. Start-up corporation tax credits under the ten-point tax reform plan for SMEs were extended introduced with the new budget to ensure that unused credits generate in the first 3 years of trading can be carried forward indefinitely.
Ireland2011-Q1/2012-Q2VATIncreaseThe standard VAT rate was increased from 21% to 23% from January 2012.
Ireland2011-Q1/2012-Q2VATDecreaseThe Jobs Initiative temporarily introduced a new reduced VAT rate of 9% on tourism services until end-2013 [0.2% GDP].
Ireland2010-Q1/2011-Q2Social security contributionIncreaseWith regard to pensions, both employee’s and employer’s contributions have been increased, leading to higher revenue of € 40 million for each group. The pay related social insurance ceiling of € 75 036 was abolished. Both the income levy and the health levy (also known as the health contribution) have been replaced by the Universal Social Charge (USC) since 1 January 2011. The USC is zero for income below € 4 004, 2 % for income up to € 10 036, 4 % from € 10 037 to € 16 016 and 7 % for income above the latter amount. For 2011, the change to USC is revenue neutral. The estimated additional annual revenue of the USC is € 420 million in the future.
Ireland2011-Q1/2012-Q2Social security contributionIncreaseBase-broadening measures for Pay Related Social Insurance (PRSI) contributed to fiscal adjustment in 2011, in particular removing ceiling on employee PRSI contributions [0.2% GDP].
Ireland2011-Q1/2012-Q2Social security contributionDecreaseAs part of the Jobs Initiative, until end of 2013, the lower rate of PRSI was halved from 8% to 4.25% on jobs that that pay up to €356 per week [0.1% GDP].
Ireland2012-Q1/2013-Q2Social security contributionChangeFrom 1 January 2013 self-employed contributors with annual self-employed income over EUR 5,000 pay PRSI at a rate of 4%, subject to a minimum payment. The minimum payment for self-employed contributors was increased from EUR 253 to EUR 500 per annum..
Ireland2011-Q1/2012-Q2Excise dutyIncreaseThe mineral oil tax on petrol and auto-diesel was increased first by four cent and then by two cent in 2011 [0.07% of GDP].
Ireland2010-Q1/2011-Q2Excise dutyIncreaseThe carbon tax introduced in December 2009 was extended in scope in May 2010 (annually € 330 million, incl. VAT). The Mineral Oil Tax on Petrol and Auto-Diesel was increased by 4 cent and by 2 cent respectively in 2011 (€ 106 million).
Ireland2012-Q1/2013-Q2Excise dutyChangeExcise duties on alcohol and cigarettes increased.
Ireland2010-Q1/2011-Q2VATDecreaseThe VAT rate was reduced by 0.5 percentage points to 21 % in 2010, bringing it back to the pre- December 2008 level (annually € -167 million).
Ireland2011-Q1/2012-Q2Other taxIncreaseA household charge of €100 was introduced in 2012, as an interim measure before implementation of the valuation-based property tax [0.1% GDP]. The temporary measures of the Jobs Initiative are financed by a levy on the pension funds (yielding € 460 million annually in 2011-2014).
Ireland2012-Q1/2013-Q2Other taxChangeVehicle Registration Tax and motor tax rates increased for all vehicles. The 2013 budget introduced new measures to support small businesses. These include an increase in the VAT cash receipts basis accounting threshold to help cash flow, the extension of the Foreign Earnings Deduction for work related travel abroad and the extension of the Employment and Investment Incentive Scheme to 2020 to help companies asscess funding. From July 2013, a new Local Property Tax (LPT) will be introduced to replace existing charges on housing. The Finance Act includes business incentives such as enhanced capital allowances in the aviation sector and the introduction of a taxation regime for Real Estate Investment Trusts, to encourage investment in the property market.
Italy2010-Q1/2011-Q2Personal income taxDecreaseChanges to the municipal fiscal system were enacted in 2011 (Law n. 42/2009). Among other things this involves: i) Taxing rental income from buildings for residential purposes at a separate, flat rate of 19-21 %, rather than including it in the personal income tax base (average rates around 30 %) with around 20 % of the revenue accruing to municipalities; ii) Allowing an additional income tax (between 0.2 % and 0.4 %) to be levied by town councils rather than by central government.
Italy2011-Q1/2012-Q2Personal income taxDecreaseChanges to the municipal fiscal system were made in 2011 (Law n. 42/2009). Among other things they involve: i) taxing rental income from buildings for residential purposes at a separate, flat rate from 19% to 21%, rather than including it in the personal income tax base (average rates around 30%), with around 20% of the revenue accruing to municipalities; and ii) removing the ‘tax rate freeze’ on the increase in additional personal income tax (between 0.2% and 0.4%) to be levied by town councils [0.1% of GDP].
Italy2011-Q1/2012-Q2Personal income taxIncreaseThe regional PIT surcharge was increased by 0.3% and a temporary 3% solidarity contribution on high incomes was introduced. The 3% levy is deductible from the PIT base.
Italy2012-Q1/2013-Q2Personal income taxChangeAs from 2013, the Stability Law has significantly increased dependent children deductions (+19 % for children over 3 years old, +36 % for those up to 3 years old and +82 % for children with disabilities). With the Stability Law 2012, the government has also extended to 2013 tax rebates on productivity-related wage expenses, on the basis of specific contracts aimed at increasing productivity signed either at company or local level.
Italy2011-Q1/2012-Q2Corporate income tax DecreaseA new allowance for corporate equity (Aiuto alla Crescita Economica, ACE), similar to the Belgian notional interest deduction, was introduced. The ACE is retroactively applied to 2011. It covers capital increases of corporations and even unincorporated businesses. The IRAP, a business tax with a different base than the CIT, saw an increase in deductions for labour costs, notably for women and for employees under 35. Companies can also deduct from their CIT taxable income an amount equal to the part of IRAP paid with reference to tha tax base allocated to their share of labour costs [Overall, 0.15% of GDP].
Italy2012-Q1/2013-Q2Corporate income tax ChangeEffective from 2013, tax deductions for employers on the labour component of the IRAP tax base are increasing from EUR 4 600 to EUR 7 500. If employers hire women or people under 35 years old, the deduction is higher and up to EUR 13 500; the deduction further increase for firms located in ‘disadvantaged’ regions (southern Italy). Small enterprises and self‐employed entrepreneurs can call on a fund worth EUR 0.54 bn and EUR 0.25 bn, respectively, for IRAP tax exemptions. A ‘Robin Hood’ surcharge on CIT of 10.5 % applies to companies operating in the energy sector until 2013.
Italy2011-Q1/2012-Q2VATIncreaseThe standard VAT rate was increased by 1 pp on 17 September 2011 (from 20%) [0.3% of GDP]. An additional 2% rise planned for October 2012, unless a general spending review reform makes it unnecessary by generating expenditures saving.
Italy2012-Q1/2013-Q2VATChangeAs from July 2013, the standard rate was expected to increase by 1 percentage point. In June 2013, the increase in the standard VAT rate from 21 to 22 % planned for July was postponed to October. The government announced it was willing to cancel this increase on a permanent basis, subject to availability of budget resources
Italy2010-Q1/2011-Q2Excise dutyIncreaseImposing of tolls on some motorways that were previously free of charge.
Italy2011-Q1/2012-Q2Excise dutyIncreaseFrom 1 January 2012 fuel excises were increased by about 10 cent per litre [0.5% of GDP].
Italy2012-Q1/2013-Q2Excise dutyChangeAs from 1 January 2013, excise duties on transport fuels increased.
Italy2010-Q1/2011-Q2Other taxIncreaseChanges to the municipal fiscal system enacted in 2011 also involve: iii) Introduction of a new tax on residential property to be levied by town councils on people owning second homes in the town and iv) allowing town councils to keep up to 50 % of revenue collected by measures against tax evasion on their territory. Additional revenues are expected by 2012 from enhanced measures to combat tax evasion. The new measures adopted against tax evasion include: i) Mandatory use of electronic invoices for amounts above € 3 000 (0.05 % of GDP by 2012); ii) Introduction of new benchmarks to check tax self-assessments of self-employed people (0.05 % of GDP by 2012); iii) Firms persistently reporting losses will be more closely inspected (0.05 % of GDP by 2012); iv) Banks must withhold 10 % of customers’ specific payments for house renovation works that benefit from tax incentives (0.05 % of GDP by 2010); v) Streamlining of procedures to collect unpaid tax dues (0.1 % of GDP by 2012); vi) Tax compensation will no longer be allowed if there are tax arrears (0.1 % of GDP by 2012); vii) Introduction of an administrative filter for claims of VAT refunds above € 10.000 and viii) Improved selection of taxpayers for audits on the basis of risk analysis, improved targeting of investigations.
Italy2011-Q1/2012-Q2Other taxIncreaseA new tax on high-powered automobiles, private boats and aircraft was introduced in 2012. Property taxes were increased by abolishing the exemption on main residences and increasing cadastral values by 60%, although some reductions are granted depending on household composition; properties held abroad, too, were made subject to a 0.76% tax on their value [0.7% of GDP]. Stamp duties on cash, deposit and security accounts were increased and extended to all financial instruments. The withholding tax on both interest (except interest from government bonds) and dividends was set at 20% [0.1% of GDP]. Other reforms addressed tax evasion, e.g. lowering the threshold for electronic payments and the 'income-meter', that estimates the income of individuals based on expenses [0.1% of GDP in 2011; 0.5% in 2012].
Italy2012-Q1/2013-Q2Other taxChangeAs from March 2013, the ‘Tobin tax’ on financial transactions applies to shares and derivatives of shares. Two rates of 0.1 and 0.2 % are applied to shares, on the net value of the whole transaction, depending on whether the securities are traded on regulated (transparent) markets or ‘over the counter’ without any control by supervisory authorities. For 2013 only, the two rates will be 0.12 and 0.22 % respectively. For derivatives, fixed sums are due based on notional amount classes.
Latvia2010-Q1/2011-Q2Personal income taxIncreaseIncrease of the general rate from 23 % to 26 % in 2010 (0.8 % of GDP). Taxation of fringe benefits (e.g. company cars) in 2010 (0.3 % of GDP). Broadening of the base to include all capital income, dividends and interests (0.2 % of GDP) in 2010. Taxation of employer’s gifts by eliminating the exemption (0.2 % of GDP). In 2011, the general personal income tax rate was slightly lowered again to 25 %. Also, non-taxable-minimum and allowance for dependants was increased in 2011.
Latvia2011-Q1/2012-Q2Personal income taxDecreaseIn 2011 the general PIT rate was lowered from 26% to 25%. Non-taxable allowances and allowances for dependent persons were increased.
Latvia2012-Q1/2013-Q2Personal income taxDecreaseA three-year strategy to reduce personal income tax from 25 % to 20 % has been adopted. The first step of lowering PIT to 24 % entered into force on 1 January 2013. The PIT exemption for dependants will be increased from LVL 70 (EUR 100) to LVL 80 (EUR 115) from 1 July 2013.
Latvia2010-Q1/2011-Q2Social security contributionIncreaseThe social security contribution rate was increased by 2 percentage points as of January 2011 to compensate for the lowering of the general personal income tax rate.
Latvia2011-Q1/2012-Q2Social security contributionIncreaseThe SSC rate was increased by two percentage points from January 2011 to compensate for the lowering of the general PIT rate.
Latvia2010-Q1/2011-Q2VATIncreaseFrom January 2011, the general VAT rate was increased by 1 percentage point to 22 % and the reduced rate by 2 percentage points to 12 %. The reduced rate on electricity has been abolished, thereby increasing the rate from 10 % to 22 %. (In 2009, the standard VAT rate had been increased from 18 % to 21 % and the reduced rate from 5 % to 10 %).
Latvia2011-Q1/2012-Q2VATIncreaseWith effect from January 2011, the standard VAT rate was increased from 21% to 22% and the reduced rate from 10% to 12%. From 1 July 2012 the standard rate of VAT was reduced from 22% to 21%. The reduced rate on electricity was abolished in January, the one on natural gas in July, thereby increasing the rate from 10% to 22%. The reduced VAT rate for medical equipment was amended from 1 June 2011. A VAT on real estate auctions within insolvency process was amended in January 2011 (0.1% of GDP). The usage of reverse VAT was broadened by applying reverse VAT on scrap metal supplies and related services form 1 October 2011 and construction services form 1 January 2012.
Latvia2012-Q1/2013-Q2VATIncreaseUse of ‘reverse VAT’ was expanded by applying it to construction activities from 1 January 2012 and to scrap metal supplies from 1 October 2011. Since 1 July 2011 the list of medical equipments that qualify for the reduced VAT rate was narroved down.
Latvia2012-Q1/2013-Q2VATDecreaseWith effect from 1 July 2012, the standard VAT rate was lowered from 22 % to 21 %.
Latvia2010-Q1/2011-Q2Excise dutyIncreaseIntroduction of an annual fee for cars and motorcycles (0.2 % of GDP) in 2010. Further increasing taxes on luxury cars and motorcycles with powerful engines in 2011. Abolishing the reduced excise duty rate for oils with 5 % biofuel admixture. Excise duties on tobacco and alcohol were increased in both 2010 and 2011.
Latvia2011-Q1/2012-Q2Excise dutyIncreaseFrom June 2011 excises on petrol and on ethyl alcohol were increased; the reduced excise tax rate on fuel with bio fuel admixture 5% of volume was abolished from 1 January 2011. From July 2011 excises on tobacco products were increased and the allowance of excises on natural gas for producing electricity was abolished. The excise tax on sweetened non-alcoholic drinks was also increased by 30% from 1 January 2011. From July 2011, allowances for excise duty for diesel fuel used in agriculture were reduced. From 1 February 2012 excise tax base has been widened by including certain lubricating oil groups. From 1 July 2011 an excise tax on natural gas was re-introduced with a reduced rate.
Latvia2012-Q1/2013-Q2Excise dutyIncreaseFrom February 2012, the excise tax base was widened to include certain lubricating oil groups.
Latvia2010-Q1/2011-Q2Other taxIncreaseFrom January 2010 the real estate tax on non-residential land and buildings was increased from 1 % to 1.5 % of the property value, while the tax base was widened by adding engineering constructions and non-cultivated agricultural land (0.2 % of GDP). Latvia also introduced taxation of residential buildings by applying a progressive rate of 0.1 %, 0.2 % or 0.3 % based on the property value (0.1 % of GDP). Measures against tax evasion included an increase in the administrative capacities of enforcing agencies, improved visibility of tax audits, enforced combating of illicit trade, a limit on the use of cash transfers and a minimum wage floor for companies participating in public tenders.
Latvia2011-Q1/2012-Q2Other taxIncreaseIn 2011 the structure of the vehicle use tax was changed, providing for three components to be taken into account by tax calculation - vehicle gross weight, engine capacity and maximum engine power, thus increasing the tax on luxury, environmentally unfriendly and powerful cars (0.1% of GDP). In 2011 the progressive property taxation of residential buildings was doubled, now ranging from 0.2%-0.6% (0.1% of GDP). From 2012 the tax on gambling, slot machines and gambling tables was increased by 15%. The annual financial stability duty rate was increased from 0.036% to 0.072%. In addition, the base of real estate tax was broadened to include auxiliary buildings, parking slots and houses and lands owned by religious organisations but not used for religious purpose [0.03% of GDP]. The natural recource tax was increased. Lottery and gambling tax rates were increased and reformed in July 2011 and Janurary 2012. Several fees and licences and state duties have been review and increased. Several legislative measures under the Action Plan to Combat the Shadow Economy and Promote Fair Competition entered into force in 2012. Law on Individual Declaration of Property and Reporting of Undeclared Income was adopted with effect from June 2012. It introduces the possibility to legalise previously undeclared taxable income and aims to improve oversight over an individual’s financial position, in particular the accuracy of expenses incurred and the payment of taxes and the legality of income derived. [0.25% of GDP].
Latvia2012-Q1/2013-Q2Other taxIncreaseIn 2012, the real estate tax base was broadened to include auxiliary buildings, parking places, and houses and lands owned by religious organisations but not used for a religious purpose. As from 2013, local municipalities are allowed to determine the tax rate within the scope of a tax rate ‘corridor’ (0.2-3 %) provided by law. As a rule, tax rates should be set between 0.2 % and 1.5 %; if real estate is not maintained according to the procedure provided by law, the rate may be set between 1.5 and 3.0 %. As of 2012, the tax on gambling, slot machines and gambling tables was increased by 15 %. The annual financial stability duty rate was increased from 0.036 % to 0.072 %. Since October 2011 several legislative measures under the Action Plan to Combat the Shadow Economy (e.g. the application of reverse VAT in sectors prone to undeclared activity and changes in the procedure for paying personal income tax on scrap metal (deduction at the place of payment)) entered into force. The Law on Individual Declaration of Property and Reporting of Undeclared Income was adopted with effect from June 2012. It allows previously undeclared taxable income to be legalised and aims to improve oversight over an individual’s financial position, in particular the accuracy of expenses incurred and tax payment and the legality of earned income. [0.25 % of GDP]. Further measures to fight shadow economy were undertaken in 2013.
Latvia2012-Q1/2013-Q2Other taxDecreaseFrom 2013, the law provides for reductions for families with three or more children.
Lithuania2010-Q1/2011-Q2Personal income tax DecreaseThe tax rate on income of self-employed persons was reduced from 15 % to 5 % and is applied on profits derived from individuals’ business activities, such as production (agriculture included), trade or various services.
Lithuania2012-Q1/2013-Q2Personal income tax Change Further reduction in the tax burden on labour and increase of the progressivity were introduced in the amendments of the PIT law adopted in July 2013. From 1 January 2014: (i) the maximum non-taxable allowance is increased from LTL 470 to LTL 570 and in gradually decreasing manner will be applicable for employment income up to LTL 3,192 per month (previously up to LTL 3,150) (ii) the additional non-taxable allowance for dependent child is increased from LTL 100 to LTL 200 (iii) the PIT rate for dividends is decreased from 20% to 15%; (v) the tax exemptions applicable for capital income are narrowed by taxing interest from deposits or non-equity securities if such income exceeds LTL 10,000 and by taxing capital gains from the alienation equity securities, if such gains exceeds LTL 10,000.
Lithuania2010-Q1/2011-Q2Corporate income tax DecreaseThe corporate income tax rate was cut back to 15 % in 2010 after having been increased from 15 % to 20 % in 2009. Withholding taxes on dividends were also cut from 20 % to 15 %. The special small companies’ rate was cut from 13 % to 5 % in 2010. From 2009 to 2013, a reduction of up to 50 % in taxable profit, subject to conditions, has been granted to firms acquiring assets such as plant and machinery, structures, ICT equipment, and rights on intangible assets. A 10 % reduced rate for agricultural income (below certain limits) was introduced in 2010, instead of more favourable special treatment for agricultural income. The rate went up to the general level of 15 % in 2011.
Lithuania2011-Q1/2012-Q2Corporate income tax DecreaseThe threshold of the maximum annual income of small companies with up to 10 employees subject to a lower rate of 5% was increased from LTL 500000 (€ 145000) to LTL 1 000000 (€ 290000).
Lithuania2012-Q1/2013-Q2Corporate income tax ChangeThere was an increase in the maximum annual income for small companies (with up to 10 employees) which would qualify for a reduced rate of 5 %, (from LTL 500 000 to LTL 1 000 000). The scope of the incentive for investment projects was widened. The incentive for companies established in free economic zones was expanded to include such activities as manufacture, repair and maintenance of aircraft, spaceships and/or equipment for them; computer software programming, consulting and other IT services; data processing and storage services; and IT service centre services. The amendments of the CIT law adopted in July 2013 prolonged CIT allowance for investment: entities will be allowed to reduce taxable profit up to 50% by the amount of expenses relating to the acquisition of new technologies (produced up to 2 years before the acquisition) also for a period of 2014 – 2018.
Lithuania2010-Q1/2011-Q2Social security contributionDecreaseOn 1 August 2010, relief from social security contributions for first-time employees was introduced.
Lithuania2012-Q1/2013-Q2Social security contributionChangeFrom 1 August 2012, relief from social security contributions (i.e. pension insurance contribution) for first-time employees was abolished. From 1 January 2013, due to the increase of the minimum statutory monthly salary from LTL 850 to LTL 1 000 (from approx. EUR 240 to EUR 290), the monthly minimum health insurance contribution (HIC) was increased from LTL 77 to LTL 90 (from approx. EUR 22 to EUR 26).
Lithuania2010-Q1/2011-Q2VATDecreaseThe 9 % reduced VAT rate was extended to include accommodation at hotels and other special accommodation services as of 2011. The reduced rates of 5 % (medicine) and 9 % (books and non-periodical publications and residential heating) were made temporary as part of the general VAT increase in 2009. They have been prolonged until 31 December 2011 with the reduced rate for books and non-periodical publications made permanent again.
Lithuania2011-Q1/2012-Q2VATDecreaseFrom 1 January 2012 the VAT registration threshold was increased from 100000 LTL (€ 29 000) to 155 000 LTL (€ 45 000). The application of a 5% reduced VAT rate on medicines was extended until the end of 2012. The application of the 9% reduced rate for residential heating was also extended until 31 December 2012. The 9% reduced rate on accommodation services introduced as a temporary measure in 2011was abolished from 1 January 2012 [0.02% of GDP].
Lithuania2012-Q1/2013-Q2VATDecreaseFrom 1 January 2013, a reduced VAT rate of 9 % was introduced for public passenger transportation services and for newspapers, magazines and other periodical printed press materials (except printed press that contains erotic or violent content and marketing materials). The reduced VAT rate of 5 % on technical equipment for disabled persons and related repairs was introduced. The 9 % reduced VAT rate on supplies of heating energy, hot and cold water intended for heating of residential premises and the 5 % reduced VAT rate applicable to medicines was extended to 31 December 2013. More simplified invoices were introduced. Starting from 1 January 2012 the threshold for registration as a VAT payer from LTL 100 000 (about EUR 29 000) was increased up to the threshold of LTL 155 000 (approximately EUR 45 000).
Lithuania2011-Q1/2012-Q2Excise dutyIncreaseThe excise duty on gas oil used as motor fuel was increased by more than 10% from € 274.27 to € 302.07 per 1000 litres with effect from 1 January 2011 [0.1% of GDP]. From 1 March 2012 the excise duty on cigarettes was increased from € 64 to € 67.19 per 1000 cigarettes. It was increased from € 23.16 to € 24.32 per kilogram of cigars and cigarillos [0.02%].
Lithuania2012-Q1/2013-Q2Excise dutyIncreaseFrom 1 January 2013, excise duty on gas oil used as motor oil was increased from EUR 302.07 to EUR 330.17 per 1 000 l. From 1 March 2012 excise duty on cigarettes was increased from EUR 64 to EUR 67.19 per 1 000 cigarettes and for cigars and cigarillos from EUR 23.16 to EUR 24.32 per kilogram of the product. From 1 March 2013, excise duty on cigarettes was increased again to EUR 70.67 per 1 000 cigarettes (EUR42.86 + 25 %, not less EUR 70.67) and for cigars and cigarillos to EUR 25.49. From 1 March 2014 the excise duty for cigarettes will increase to EUR 74.14 (EUR45.47 + 25%, not less EUR 74.14) and for cigars and cigarillos to EUR 26.93. From 1 January 2013 the excise duty for tobacco was increased from EUR 40.26 to EUR 47.21 per kilogram of the product. From 1 April 2014 the excise duty on ethyl alcohol will increase from EUR 1279 to EUR 1292 per hectolitre of pure ethyl alcohol as well as excise duties on beer, intermediate products, wine and other fermented beverages will increase by 10-47%.
Lithuania2011-Q1/2012-Q2Other taxIncreaseFrom 1 January 2012 Lithuania broadened the immovable property tax base to include the immovable property intended for dwelling purposes, gardens and garages etc owned by individuals. Until now these were exempt unless they were used for commercial purposes. The value of previously tax exempt immovable property of natural persons exceeding LTL one million (€ 290000) will be subject to a tax rate of 1% [0,02%].
Lithuania2011-Q1/2012-Q2Other taxChangeAt the end of 2010 the government adopted 'Consolidated strategies of the state tax inspectorate of taxpayers' compliance with tax obligations and assurance of tax collection for the year 2011-2012. Cash registers have been installed in all indoor marketplaces and border control has been strengthened.
Lithuania2012-Q1/2013-Q2Other taxChangeNew immovable property tax rates are effective from January 2013 varying from 0.3 % to 3 % of the taxable value of the property (formerly 0.3 % to 1 %). The exact tax rate is set by the municipalities. From the same date, the new Law on Land Tax entered into force, harmonising land taxation with taxation of other immovable property (previously land was taxed at 1.5 of its cadastral value). The annual tax rate ranges from 0.01 % to 4 % and is set by the municipality in which the land islocated.
Luxembourg2011-Q1/2012-Q2Personal income taxDecreaseThe temporary crisis tax of 0.8% levied on total income except minimum wage salaries introduced for the year 2011 was abolished from January 2012.
Luxembourg2010-Q1/2011-Q2Personal income taxIncreaseAs of January 2011, the top income tax rate is increased from 38 % to 39 %. In addition, the surcharge for the employment fund (solidarity tax) is increased from 2.5 % to 4 % for income up to € 150 000 and to 6 % for income above € 150 000. A temporary crisis tax amounting to 0.8 % levied on total income except minimum wage salaries was introduced for the years 2011 and 2012. As a result, the aggregate top personal income tax rate has increased from 38.95 % to 42.14 %.
Luxembourg2011-Q1/2012-Q2Personal income taxIncreaseFrom January 2011, the top income tax rate was increased from 38% to 39%. The surcharge for the employment fund (solidarity tax) was also increased from 2.5% to 4% for income up to € 150000 and to 6% for income above € 150000 [0.20% of GDP].
Luxembourg2012-Q1/2013-Q2Personal income taxChangeAs of January 2013 a top rate of 40 % has been introduced for individuals, which applies to incomes of more than EUR 100 000 (EUR 200 000 for jointly taxed couples). The maximum deduction for interest on loans is reduced by 50 % and the deductible amount is limited to EUR 336 per taxpayer. The same deduction is also applied to the taxpayer’s spouse or partner and for each child belonging to the taxpayer’s household. As the four first kilometres of travel (from home to workplace) are no longer deductible, the maximum amount of travel expenses deductible per taxpayer has been reduced by EUR 396. PIT has been increased by a surcharge for the Employment Fund. The new rate as of January 2013 is 7 % (previously 4 %). The rate is 9 % for taxable income exceeding EUR 150 000 (EUR 300 000 for jointly taxed couples). Taking into account the surcharge, the top marginal tax rate is 43.6 %, applying to incomes of more than EUR 150 000 (EUR 300 000 for jointly taxed couples).
Luxembourg2011-Q1/2012-Q2Corporate income tax DecreaseThe 2012 budget grants a tax credit to employers hiring workers from the unemployed pool until 2014.
Luxembourg2010-Q1/2011-Q2Corporate income tax IncreaseOn 1 February 2010 a self-assessment system for corporate taxation entered into force. The surcharge has been increased from 4 % to 5 % for contributing to unemployment social security, which results in a combined tax rate for Luxembourg of 28.8 %, instead of 28.59 %. The 2011 tax plan also introduced a minimum fixed corporate income tax of € 1 500 per year levied on entities subject to corporate income tax whose financial assets exceed 90 % of total assets and which are not subject to a business licence or controlled by a supervisory authority. The tax credit for investments was increased and additional measures (e.g. specific depreciation provisions) have been introduced to promote energy saving and to protect the environment. The tax plan 2011 imposes restrictions on the deductibility of departure indemnities granted to employees.
Luxembourg2011-Q1/2012-Q2Corporate income tax IncreaseThe 2012 budget introduces a new table with revaluation coefficients for the valuation of business assets and participations.
Luxembourg2012-Q1/2013-Q2Corporate income tax ChangeThe corporate tax system is, in principle, classical. The tax on profit is calculated by adding the general CIT rate of 21 % (previously 22 %), a 7 % (5 % until 2012) solidarity tax surcharge for the employment fund and a municipal business tax (which for Luxembourg City amounts to 6.75 %), taking the all-in effective rate to 29.22 % for Luxembourg City (28.8 % in 2012). As of January 2013, a new minimum corporate income tax is applied, ranging from EUR 500 for small companies (with a total balance sheet below EUR 350 000) to EUR 20 000 if the total balance sheet exceeds EUR 20 million. Luxembourg also applies a system of investment credits and provides for specific tax incentives. As of 2013, these will be reduced.
Luxembourg2012-Q1/2013-Q2VATChangeAs of 2013, the turnover threshold for the VAT exemption for small enterprises (régime de la franchise) will increase from EUR 10 000 to EUR 25 000. For VAT on private residences, the gain from applying the 3 % reduced VAT rate on construction and renovation works of dwelling will be limited to EUR 50 000.
Luxembourg2011-Q1/2012-Q2Excise dutyIncreaseFrom January 2012 the excise duty rates on manufactured tobacco was increased to 10% of the purchase price with a maximum of € 10 per kilogram.
Luxembourg2012-Q1/2013-Q2Excise dutyChangeRegarding excise duties on car fuels, the rate applicable for diesel-driven cars is EUR 338.36 per 1 000 litres from 1 September 2012. Tobacco taxation changed from 1 January 2013. The new excise rates applying to cigarettes are 45.84 % (proportional component) and EUR 10.3586 per 1 000 cigarettes (specific component).
Luxembourg2010-Q1/2011-Q2Other taxIncreaseThe annual subscription tax (taxe d’abonnement) of 0.05 % was abolished for exchange traded funds as of January 2011.
Malta2011-Q1/2012-Q2Personal income taxDecreaseFrom 2012, new income tax brackets apply to income earned by parents of children under 18 years. Income up to € 9 300 is tax-free. From € 9 301 to € 15 800 a tax rate of 15% applies. From € 15 801 to € 21 200 a rate of 25% applies and a rate of 35% applies to income above € 21 200. Parents who qualify for these tax rates should benefit from an annual tax saving of between € 75 and € 420 per parent [0.2% of GDP]. To help women return to the labour market the current tax credit of up to € 5 000 was extended to include self-employed mothers.
Malta2012-Q1/2013-Q2Personal income taxChangeThe top income tax rate of 35 % per cent will be reduced to 32 % for people with annual income of less than EUR 60 000.
Malta2012-Q1/2013-Q2Corporate income tax ChangeUnder certain terms and conditions, a tax exemption may apply to domestic mergers and group restructuring, if it is ascertained that there are sound economic reasons for the merger/division.
Malta2012-Q1/2013-Q2VATChangeThe VAT exemption on diesel purchased by fishermen for fishing purposes will be extended to 2013.
Malta2012-Q1/2013-Q2Social security contributionChangeParents born between 1 January 1952 and 1 January 1961 who stop working to take care of their children with the intention of resuming their occupation will be credited with the equivalent of one year’s social security contributions per child (two years for disabled children). Regarding pension incentives and deductions for persons with a disability, an income tax deduction has been introduced for fees paid by parents and relatives in respect of residency services (for the elderly) and community support services.
Malta2010-Q1/2011-Q2Excise dutyDecreaseThe levy on credit cards (€ 16.31) was abolished in 2010.
Malta2010-Q1/2011-Q2Excise dutyIncreaseAs of 2010 a registration tax is levied on Euro 3 and lower-standard commercial vehicles.
Malta2011-Q1/2012-Q2Excise dutyIncreaseFrom 15 November 2011, excise duty rates on cigarettes was increased by 5.8% and excise duty on tobacco was increased by 8.5% [0.1% of GDP]. Excise duty on cement was increased by € 3 on every 1000 kg. Bunkering tax on fuel for ships outside Maltese territorial waters was set to €1.86 per metric ton or part thereof.
Malta2012-Q1/2013-Q2Excise dutyChangeExcise duty is being increased on fuel by EUR 0.02 per litre, cement by EUR 5 per tonne and on cigarettes and tobacco by 6 % and 8 % respectively.
Malta2011-Q1/2012-Q2Other taxIncreaseThe registration tax on motor vehicles with Euro 1 to Euro 3 emissions (or worse) increased on 1 January 2012 [0.1% of GDP]. Measures have been introduced to improve the efficiency of the revenue collection, notably pecuniary incentives to reduce tax arrears. Several other initiatives are being implemented to combat tax evasion and avoidance, including reforms aimed at increasing the effectiveness of VAT tax audits [0.6% of GDP].
Malta2012-Q1/2013-Q2Other taxChangeThe seven-year period for opting out of the 12 % final withholding tax capital gains regime on transfers of immovable property will be extended to 12 years. A donation or transmission causa mortis of immovable property from parents to their children will no longer be subject to tax. A stamp duty of 3.5 % will apply on the first EUR 150 000 of the value of the property when buying immovable property as a sole ordinary residence. A 25 % refund on expenditure will be introduced as an incentive for the restoration and development of property. Motor vehicle registration tax on Euro V cars will be reduced whilst motor vehicle registration tax on Euro IV cars will be increased. The registration tax for commercial vehicles will also be reduced.
The Netherlands2011-Q1/2012-Q2Personal income taxDecreaseThe rate in the first two brackets consists of two elements: income tax and social security contributions. In January 2011, the combined tax and SSC rate in the first bracket of personal income tax and wages tax was reduced from 33.45% to 33%. From 2012, the tax deduction for R&D activities for self-employed was increased to € 12 310 for entrepreneurs and can be increased by another € 6 157 for starting entrepreneurs. Since 2012 there is a 40% tax deduction for R&D expenses.
The Netherlands2010-Q1/2011-Q2Personal income taxIncreaseAs of January 2011, the tax rate in the first bracket of personal income tax and wages tax is reduced from 2.30 % to 1.85 % (from 2012, the rate will be 2.00 %). A new top bracket was introduced in the imputed income for owner-occupied housing, increasing the imputed income from 0.55 % to 0.8 % for the part of the value that exceeds € 1 010 000 in 2010. In 2011, the imputed value was further increased to 1.05 of the value that exceeds € 1 020 000. The top imputed value will increase to 2.35 % by 2016. The tax plan 2011 increased the exemption for business succession, introduced in 2010, from 75 % to 100 % for businesses with a maximum value up to € 1 006 000, and to 83 % for the excess. For the tax due, a 10 year tax deferral is granted.
The Netherlands2011-Q1/2012-Q2Personal income taxIncreaseFrom January 2012, the imputed income for the owner-occupied dwellings was increased from 1.05% to 1.3% for the part of the value that exceeds € 1040000. From January 2012, the combined rate for the first bracket increased to 33.10%. From January 2012 two tax credits on labour participation by workers of 65 years and older were decreased. The amount of the cut varies depending on income and age.
The Netherlands2012-Q1/2013-Q2Personal income taxChangeThe employers’ health insurance premium no longer counts as taxable income from 2013. This operation was made budget-neutral by adjusting the first and second tax bracket, several tax credits, tax rates in the first and second tax bracket, allowances and social security premiums. In 2013, workers aged 60 to 63 can receive an additional tax credit if they carry on working. In 2013, a one-off surtax of 16 % applies to wages exceeding EUR 150 000. The yearly adjustment of tax brackets to reflect inflation did not take place in 2013.
The Netherlands2010-Q1/2011-Q2Corporate income tax IncreaseAs of January 2010, the ‘patents box’ scheme was turned into an ‘innovation box’ for innovative entrepreneurs: income derived from R&D is taxed at a rate of 5 % instead of 10 %, and the ceilings were abolished. Furthermore, a 3-year carry-back period was introduced for losses incurred in 2009 and 2010. As of January 2011, the corporate income tax rate is reduced to 25 % from 25.5 % for profits above € 200 000. The 2011 tax plan reduced the environment investment deduction from 15 % to 13.5 %, 30 % to 27 % and 40 % to 36 %, depending on the type of investment. As part of an extra crisis package, the rates of the environment investment deduction had been increased temporarily from 15 %, 30 % and 40 % to 35 %, 50 % and 60 % from July 2009 until December 2010). As of 1 January 2010, the profit exemption for SMEs, granted under the tax plan 2009, was raised from 10.5 % to 12 %. The minimum criterion for spending time on the business was dropped, making it more attractive to carry on a business alongside salaried employment. To foster business growth, the small-scale investment tax credit (KIA) was substantially increased. An exemption for investment in SMEs was introduced in Box 2 of the personal income tax.
The Netherlands2011-Q1/2012-Q2Corporate income tax DecreaseFrom January 2011, the corporate income tax rate is reduced to 25% from 25.5% for profits in excess of € 200000 [0.07% GDP]. Since 2012 a new tax facility provides for 40% deduction for R&D expenses.
The Netherlands2010-Q1/2011-Q2VATDecreaseThe tax plan 2011 introduced a temporary reduction in the VAT rate from 19 % to 6 % on labour used in the renovation of dwellings older than 2 years until 1 July 2011.
The Netherlands2011-Q1/2012-Q2VATIncreaseFrom 1 July 2011, performing arts were transferred temporarily to the standard VAT rate of 19%.
The Netherlands2012-Q1/2013-Q2VATChangeThe standard VAT rate was increased from 19 % to 21 % on 1 October 2012.
The Netherlands2012-Q1/2013-Q2Social security contributionChangeAs of 2013, employers pay 7.75 % of gross earnings and self-employed and pensioners 5.65 % of their net business profits or pension for health insurance up to a maximum salary income of EUR 50 853 to the state health insurance fund. As of 2013, for employers hiring older or disabled workers a mobility bonus of EUR 7 000 is applied for a maximum of three years. The bonus is subtracted from the amount of social security premiums to be paid.
The Netherlands2010-Q1/2011-Q2Excise dutyIncreaseExcise duties on cigarettes and tobacco were increased as of 1 March 2011. The increase amounts to € 11.68 per 1 000 cigarettes. Highly fuel-efficient cars are no longer subject to motor vehicle taxation (since 2009 based on CO2 emissions) and, as of January 2010, they benefit from a € 500 (€ 750 in 2010) reduction of car purchase tax.
The Netherlands2011-Q1/2012-Q2Excise dutyIncreaseExcise duties on cigarettes and tobacco are increased from 1 March 2011. The yearly adjustment for tobacco and cigarettes took place in April 2012 increasing the minimum excise duty to € 157.28 per 1 000 cigarettes and to € 66.50 per 1000 grams for smoking tobacco. For mineral oils there is an increase of € 0.01 per litre (only for LPG per kilogram) from January 2012 to adjust for inflation.
The Netherlands2012-Q1/2013-Q2Excise dutyChangeAlcohol and tobacco excises were raised in 2013.
The Netherlands2011-Q1/2012-Q2Other taxDecreaseThe property transfer tax for owner-occupied dwellings was temporarily reduced from 6% to 2% from 15 June 2011 to July 2012. In July 2012, the reduction was made permanent. From July 2012 the CO2 limits of the car registration tax (BPM) is tightened each year to ensure stable tax revenue. At the same time the fixed surcharge for diesel cars is replaced by a surcharge depending on the amount of CO2 emission. The taxes on groundwater and waste materials were abolished in 2012.
The Netherlands2012-Q1/2013-Q2Other taxChangeIn October 2012, a tax on banks was introduced. In January 2013, insurance tax increased from 9.7 % to 21 %. To support the housing market, a temporary cut in property transfer tax from 6 % to 2 % has been made permanent. From 1 January 2013, interest on new mortgages for owner occupied dwellings is only tax deductible on mortgages that are repaid in full (and at least as annuity) over the course of the loan agreement of 30 years. Interest on new mortgages on which no capital is paid back is no longer deductible. The WBSO will be maintained as the main instrument for stimulating R&D by providing tax deductions for the wages of R&D workers. The ‘green’ element of car taxation has been reinforced. In 2013, the upper CO2 limit for the exemption from vehicle tax was further reduced, and tax on vehicles with higher CO2 emissions increased.
Poland2011-Q1/2012-Q2Personal income taxIncreasePIT thresholds were frozen at their 2009 level in 2011 and 2012 [0.1% of GDP].
Poland2012-Q1/2013-Q2Personal income taxChangeFrom 2013, the personal income tax base will be broadened as the use of statutory 50 % costs of earnings from copyright and licences used mainly by high income earners will be limited. The tax credit for taxpayers with more than two children will be increased.
Poland2010-Q1/2011-Q2Social security contributionIncreaseA reform of the pension system scheme aimed at preventing public debt from rising to excessive levels entered into force in April 2011. The intention is to progressively reduce transfers to privately managed pension funds from 7.3 % to 2.3 % of workers’ salaries and redirect the 5 % into the public old-age pension system. This will not change the effective tax burden on either the employees or the employers.
Poland2011-Q1/2012-Q2Social security contributionIncreaseFrom 1 February 2012, non-wage labour costs were increased by increasing the disability pension contribution paid by employers from 4.5% to 6.5% of gross wages. The total rate of disability pension contribution therefore increased from 6% to 8% of gross wages [0.3% of GDP].
Poland2010-Q1/2011-Q2VATIncreaseA series of measures in the VAT area came into force in 2011. The VAT rates were temporarily increased (for the years 2011-13) by 1 percentage point, from 7 % to 8 % and from 22 % to 23 %. At the same time, a new reduced rate of 5 % was introduced for, amongst others, basic foodstuffs. The plan is that if this increase in VAT rates does not help to reduce the public debt, there will be two further such rises, each of 1 percentage point, in the years to come.
Poland2011-Q1/2012-Q2VATIncreaseA series of measures came into force in 2011 [0.41% of GDP]. The VAT rates were temporarily increased for the years 2011-13 by 1 pp, from 7% to 8% and from 22% to 23%. A new reduced rate of 5% was introduced for, amongst others, basic foodstuffs. VAT reimbursement for company cars and fuels was abolished in 2011 [0.08% of GDP]. From 2012 the VAT rates for certain products, including some medical devices, clothing and clothing accessories for infants and children's' footwear, were increased from 8% to 23%. The 23% rate also applies to the previously exempt services related to the conservation and restoration of registered historical monuments and archive materials and to the services delivered by public institutions.
Poland2012-Q1/2013-Q2VATChangeFrom April 2013, the 23 % rate will apply to folk art and crafts (instead of an reduced rate) and on certain postal services. As of 2012, the threshold for qualifying as a small taxpayer for income tax and VAT purposes is PLN 5 324 000 (EUR 1 201 155) of annual turnover, including VAT.
Poland2010-Q1/2011-Q2Excise dutyIncreaseOn 1 January 2011, excise duty on tobacco was increased by 4 % (PLN 220 m (€ 55 m)). Further increases in the excise duty rates on tobacco products by 4 % a year in 2012 and 2013 are being considered. In line with the Energy Directive, as of 2012 the excise tax will also apply to coal and coke, which has so far been exempted.
Poland2011-Q1/2012-Q2Excise dutyIncreaseThe government is gradually increasing the excise duties rates on tobacco products (8% for cigarettes, 13% for smoking tobacco, 4% for cigars) and for fuels (3% for jet engine fuels, 14% for diesel and intrinsic bio-components). In line with the Energy Directive, from 2012 the excise tax applies to coal, lignite and coke, so far exempted (due to the transition period).
Poland2011-Q1/2012-Q2Other taxIncreaseOn 18 April 2012, a new tax on extraction of certain minerals, targeted at copper and silver extraction, came into force. The applicable tax rate is determined based on the exchange rate of American dollar to Polish zloty and copper and silver prices on stock exchanges’ quotations in London [0.1% of GDP].
Portugal2010-Q1/2011-Q2Personal income taxIncreaseAs part of the consolidation measures, the personal income taxation (IRS) rates were increased by 1 percentage point up to the 3rd bracket and by 1.5 percentage points as of the 4th bracket from 1 July 2010. Also, as of 1 July 2010, a new top tax bracket of 45.88 % for income above € 150 000 was introduced, which is applicable to the whole of 2010. The withholding tax rates were also increased by 1.5 percentage points. A new 20 % tax rate applies to capital gains exceeding € 500 annually derived as from 1 January 2010 and without the previous distinction of the holding period. As of 2011, expense related tax credits were somewhat reduced in personal income tax by imposing an overall ceiling for the two highest income tax brackets.
Portugal2011-Q1/2012-Q2Personal income taxIncreaseFrom 2011, expense-related tax credits were reduced by imposing an overall ceiling for the two highest income tax brackets. To comply with the MoU targets, a new annual surtax on individual income was introduced on 3 August 2011. It is levied at a rate of 3.5% and applies only to income earned in 2011 that is above the minimum wage income. In 2012 and 2013 a surtax of 2.5% applies to the highest income bracket. The tax rate applicable to capital gains on the sale of shares and other securities was increased from 21.5% in 2011 to 25% with effect from 1 January 2012. An increase from 21.5% to 25% in withholding taxes on income from dividends, interest and other forms of remuneration on shareholders' loans and on share capital derived by resident and non-resident individuals was adopted in 2011.
Portugal2012-Q1/2013-Q2Personal income taxChangeThe budget law for 2013 increased the average PIT rates and the maximum marginal rate increased to 48 %, on incomes over EUR 80 000. On top of the regular PIT, a 3.5 % surtax on taxable income above the minimum wage and additional, progressive solidarity rates (2.5% on income over EUR 80000 and 5% on income over EUR 250000) apply. Capital gains tax increased from 25 % to 28 % of the positive difference between capital gains and capital losses arising from the disposal of shares, applicable to resident and non-resident individuals (that tax rate had already increased in 2012 from 20 % to 25 %). The withholding tax rate for resident and non-resident individuals applied to investment income e.g. from dividends, interest from bank deposits and debt securities increased to 28 % (the withholding tax rate also rose twice in 2012, from 21.5 % to 25 % and to 26.5 % in November). Withholding tax on income of self-employed workers, also increased, from 21.5 % to 25 %. Rental income is subject to a special rate of 28 %, but the taxpayer has the option of including it in aggregated income. The deductibility of mortgage interests has been further reduced and some other fiscal benefits curbed.
Portugal2010-Q1/2011-Q2Corporate income tax IncreasePortugal introduced an additional state corporate income tax (IRC) of 2.5 percentage points to taxable profits exceeding € 2 million as of July 2010. The 2011 budget includes several changes for corporate income tax, such as an increase in the minimum corporate income tax assessed, as compared to the amount that would have been assessed in the absence of tax benefits and special regimes.
Portugal2011-Q1/2012-Q2Corporate income tax IncreaseFrom 1 January 2012 the reduced CIT rate of 12.5% was abolished. A State surtax of 3% is levied on corporate income between € 1.5 and € 10 million and a 5% rate is levied on taxable profits over € 10 million with effect from 1 January 2012. The withholding tax on investment income earned by legal entities without a permanent establishment in Portugal was increased from 21.5% to 25%.
Portugal2012-Q1/2013-Q2Corporate income tax ChangeThe withholding tax rates applicable to royalties, commissions, service fees and property income earned by non-residents have been increased from 15 % to 25 %. There has also been an increase from 21.5 % to 25 % in the tax rate applicable on the positive balance between capital gains and capital losses obtained by securities investment funds and from 20 % to 25 % of the tax rate applicable to property income obtained by real estate investment funds. As from 1 January 2013, the lower taxable profit threshold for the 5 % rate was reduced from EUR 10 million to EUR 7.5 million. The 5 % rate applied to taxable profits over EUR 10 million from 1 January 2012. The deductibility of interests has been limited so that net financial costs are deductible only up to the greater of the following thresholds, EUR 3 million threshold or 30% of the EBITDA.
Portugal2010-Q1/2011-Q2Social security contributionIncreaseThe contribution rates of workers to the civil servants security schemes will increase by one percentage point as of 1 January 2011 (thereby aligning this rate with the contribution rate for the general social security scheme).
Portugal2011-Q1/2012-Q2Social security contributionIncreaseTo align the rates with those of the general social security scheme, employees' contribution rates to the civil service social security scheme were increased by 1 pp from January 2011.
Portugal2012-Q1/2013-Q2Social security contributionChange In January 2013, the Portuguese government adopted an incentive to recruit unemployed people over 45 years of age, a group vulnerable to unemployment, via reimbursement of employers’ social security contributions , under certain conditions. The base for calculation of social contributions was widened by including supplementary payments to public employees and sickness and unemployment benefits (above a minimum level).
Portugal2010-Q1/2011-Q2VATIncreaseThe standard, intermediate and reduced VAT rates were increased by one percentage point to 21 %, 13 % and 6 %, respectively as of July 2010 (0.3 % of GDP in 2010 and 0.7 % in 2011). The 2011 budget included a further increase in the standard VAT rate to 23 % as of January 2011. The 2011 budget also included minor changes in the goods and services that should be subject to the reduced rates of 6 % and 13 %.
Portugal2011-Q1/2012-Q2VATIncreaseThe standard VAT rate was increased from 21 to 23% from January 2011. From October 2011, the VAT rate on electricity and natural gas was increased from the reduced rate of 6% to the standard rate of 23%. A set of categories of goods and services were moved from the reduced and intermediate VAT rates to higher ones in 2011.
Portugal2012-Q1/2013-Q2VATChangeA cash accounting regime was adopted in May 2013 (and will come into force in the last quarter of 2013) under which VAT is due when payments are made, not when invoices are issued.
Portugal2011-Q1/2012-Q2Excise dutyIncreaseWith effect from 1 January 2012 Portugal introduced an excise duty on electricity consumption by consumer, producers, traders and self-producer. The maximum rates of excise duties on petrol, spirit drinks, heating diesel and tobacco were also increased.
Portugal2012-Q1/2013-Q2Excise dutyChangeThe 2013 budget increased the maximum rates of excise duties on petrol, spirit drinks, heating and tobacco.
Portugal2010-Q1/2011-Q2Other taxIncreaseIn 2011, the real estate tax on specified properties was increased from 1 % to 5 % and the reduced real estate transfer tax (of 4 % for certain properties) revoked. On 1 January 2011, Portugal also introduced a levy on credit institutions which have their main head office (or effective management) in Portugal or in the Portuguese subsidiaries or branches of credit institutions without a main head office in Portugal. The tax is levied on the liabilities, reduced by Tier 1 and Tier 2 capital and by guaranteed client deposits at rates from 0.01 % to 0.05 %. The notional amount of off balance financial derivative instruments is subject to a levy with rates ranging from 0.0001 % to 0.0005 %. The levy is not deductible from corporate income tax. An additional stamp duty on consumer credits was introduced in 2010.
Portugal2011-Q1/2012-Q2Other taxIncreaseWith effect from 1 January 2012 the minimum and the maximum rates of the real estate tax on urban property were increased by 0.1 percentage points.
Portugal2012-Q1/2013-Q2Other taxChangeThe 2013 Budget Law extends the bank levy, the financial sector’s contribution, to 2013. Employees pay contributions equal to 11 % of their gross salary without any ceiling. The applicable social contributions rate for employers varies according to the employment contract. In 2013, a rate of 23.75 % applies to permanent contracts and 26.1 % to fixed term contracts. Property taxation: The revaluation of 4,9 million properties that took place recently underpinned changes to the assessment of the recurrent property tax. Following the widening of the tax base, municipalities lowered their tax rates, varying now between 0,3% and 0,5%. Safeguard clauses were introduced to prevent a too high increase for low-income taxpayers. A stamp duty on high-value properties (above EUR 1 million) has been also introduced.
Romania2010-Q1/2011-Q2Personal income taxIncreaseBroadening of the personal income tax base to cover incomes from capital gains, including interests on bank deposits, severance payments and lunch vouchers. Any income obtained by individuals after 1 January 2011 ascertained by the tax authorities, for which the source has not been identified, will be taxed at a rate of 16 %. The taxable base is adjusted on the basis of the procedures and indirect methods for the reconstitution of revenues or expenses.
Romania2010-Q1/2011-Q2Corporate income taxIncreaseThe 3 % tax rate on gross income obtained by micro-companies (having 1-9 employees and a turnover of less than € 100 000) is reintroduced as an alternative to the general CIT rate (16 %).
Romania2012-Q1/2013-Q2Corporate income taxChangeAs of February 2013, the previously optional turnover-type tax of 3 % on gross income applicable to microenterprises became mandatory for any SME with a gross income lower than EUR 65 000; the Ministry of Finance is expecting a positive impact on the revenue collected. The impact of the measure remains to be seen, as highly profitable companies would be favoured, while companies running losses would be disadvantaged. As of February 2013, the existing tax deduction for R&D expenditure was further increased from 120 % to 150 %. However, the strict eligibility conditions attached to the present R&D tax incentives make them barely functional in stimulating private R&D spending.
Romania2010-Q1/2011-Q2Social security contributionIncreaseEqualising the cap of social contributions for both employers and employees. With effect from 1 January 2011, an obligation to pay a health contribution (5.5 %) when pension income is higher than € 173 (i.e. the contribution will apply to the total pension amount) was introduced.
Romania2010-Q1/2011-Q2VATIncreaseIncrease in standard VAT rate from 19 % to 24 % in July 2010. Rules determining the place of supply for goods and services (and hence the place for VAT taxation) have been fully harmonised with EU Directive 112/2006 and EU Directive 8 / 2008 regarding VAT. Approval of the Code of Tax Procedure, which aims to address VAT fraud, improve management of tax arrears, and increase inspection of the largest taxpayers.
Romania2010-Q1/2011-Q2Excise dutyIncreaseExcise duties on energy and cigarettes were increased.
Romania2011-Q1/2012-Q2Excise dutyIncreaseWith effect from 1 July 2012, the excise duty on cigarettes was increased from € 51.49 per 1 000 cigarettes to € 53.18 per 1 000 cigarettes. The total excise duty on cigarettes (i.e. sum of the specific excise duty and the ad-valorem excise duty), is increased from € 76.60 per 1 000 cigarettes to € 79.19 per 1 000 cigarettes for the period from 1 July 2012 until 30 June 2013. Excise duties on unleaded petrol and diesel were increased in January 2011. This was followed by a further increase of excise duties on diesel in January 2012. They currently stand at € 467 per tonne for petrol and € 374 per tonne for diesel.
Romania2012-Q1/2013-Q2Excise dutyChangeFollowing a recent change to the tax code in January 2013 by means of a government ordinance, excise duties on beer and fermented beverages are based on alcohol concentration as well as the production process. Excise duties on beer have been increased. Total excise duties on cigarettes will be increased every year on 1 April until 2018. In 2018, the EU minimum for excise duty will be reached.
Romania2010-Q1/2011-Q2Other taxDecreaseIncomes obtained from prizes and from gambling, in money and/or in kind, that are below RON 600 for each prize or from the same organiser or payer during a single day, are not taxable. Previously such gains were subject to a 25 % withholding tax.
Romania2010-Q1/2011-Q2Other taxIncreaseIncrease in several local taxes (e.g. vehicle tax, taxes on the issue of certificates, notices and authorisations for advertising).
Romania2011-Q1/2012-Q2Other taxIncreaseUnder the legislation that entered into force in mid-January 2012, a pollution tax applies to both new and second-hand vehicles produced in Romania or abroad on their first registration in Romania.
Romania2012-Q1/2013-Q2Other taxChangeAn ‘environmental stamp tax’ which differentiates car purchase tax based on CO2 emissions has been introduced. This is consistent with efforts to tax environment-related negative externalities. In early 2013, Romania also adopted a tax on the exploitation of natural resources other than natural gas, together with a tax on surplus revenue obtained as a consequence of the deregulation of natural gas prices.
Slovakia2010-Q1/2011-Q2Personal income taxIncreaseIn 2011, deductions for contributions to supplementary pension insurance and amounts deposited on savings schemes are abolished. Also, the personal allowances can be claimed only with respect to aggregate income from employment, business activities and independent professional activities.
Slovakia2011-Q1/2012-Q2Personal income taxIncreaseFrom 1 January 2011, basic personal allowances can only be claimed on aggregate income from employment, business activities and independent professional activities. The amount of the basic personal allowance and the relevant ceilings are generally based on the amount of the living minimum applicable on 1 January of the tax year. This was € 185 in 2011 and it is € 189 for 2012.
Slovakia2012-Q1/2013-Q2Personal income taxChangeA tax amendment adopted at the end of December 2012 replaced the flat tax with a progressive income tax with a top rate of 25 %. Earnings, equal to gross wage less social and health contributions, of up to 176.8 times the subsistence minimum will be subject to the 19 % tax rate (up to EUR 34 401.75 in 2013), and 25 % above that.
Slovakia2012-Q1/2013-Q2Corporate income tax ChangeAs of 1 January 2013, the corporate tax rate increased to 23 %.
Slovakia2010-Q1/2011-Q2Social security contributionIncreaseNon-monetary benefits provided to an employee, which are considered to be taxable employment income, are also subject to social security and health insurance contributions (as from 1 January 2011).
Slovakia2011-Q1/2012-Q2Social security contributionIncreaseFrom 1 January 2011, non-monetary benefits given to an employee, regarded as taxable employment income, are also subject to social security and health insurance contributions
Slovakia2012-Q1/2013-Q2Social security contributionChangeIn 2013, Slovakia simplified the rules for social contributions: for the self-employed, the basis for calculating SSCs was adjusted by increasing the minimum level. It will be broadened during the 2013-15 period by decreasing a coefficient that previously reduced the base. The possibility of deducting 40 % of expenses without any bookkeeping to reduce the tax base was limited in nominal terms to EUR 5040 per year or 420 EUR per month. SSCs were significantly increased for workers by agreement who have a regular income. Those with an irregular income will pay lower rates, and students, the disabled and pensioners will be exempted. As of 1 January 2013, health insurance contributions from dividends are being increased from 10 to 14 % and withheld. The maximum assessment base for health insurance contributions from dividends is higher than for other income types. It is set at EUR 94 320 for 2013 (120 times the average monthly salary). The minimum assessment base is set at EUR 337.70 for employees, while for self-employed it is half of the average gross wage (0.5 x 786 EUR/month) The minimum assessment base does not apply to dividends.
Slovakia2010-Q1/2011-Q2VATIncreaseFrom 2011, the standard VAT rate was (temporarily) increased from 19 % to 20 %. This rate will be applicable until the last day of the calendar year in which Eurostat declares that the deficit of the Slovak Republic is below 3 % of GDP.
Slovakia2010-Q1/2011-Q2Excise dutyDecreaseIn January 2010, the excise duty on diesel fuel was reduced.
Slovakia2010-Q1/2011-Q2Excise dutyIncreaseIntroduction of a tax on CO2 emission quotas (effective as of 1 January 2011), which is imposed on the emission allowances allocated free of charge to the taxpayer in the period 2011-2012. The tax rate is 80 % of the tax base which is constituted by: i) the transferred emission quota (valued at market price for the calendar month preceding the transfer), and ii) the non-consumed emission quota (valued at the average market price for the respective calendar year). The calculated amount of tax on emission quota is not considered as a tax deductible expense. There were increases in various excise duties (e.g. tobacco) from 2011. Excise duties on spirits were increased as of March 2010.
Slovakia2011-Q1/2012-Q2Excise dutyIncreaseWith effect from January 2011, a tax on CO2 emission quotas was introduced on the emission allowances allocated free of charge to the taxpayer in the period 2011-12. The tax rate is 80%. The tax base made up of transferred emission quota (valued at market price for the calendar month preceding the transfer), and non-consumed emission quotas (valued at the average market price for the calendar year in question). The calculated amount of tax on emission quotas is not considered a tax deductible expense. From 2011, excise duties on tobacco products were increased.
Slovakia2011-Q1/2012-Q2Other taxIncreaseWith effect from 1 January 2012, Slovak banks and branches of foreign banks operating in the Slovak Republic, established under special legislation on banks, are subject to a bank levy. The levy is 0.1%. It is due on the 20th day of every calendar quarter. It is calculated on the basis of the bank’s liabilities at the end of the previous calendar quarter (adjusted by certain items defined by law) [0.1% of GDP]. The UNITAS project was launched in January 2012. It aims to merge revenue collection bodies (taxes and customs) into a single institution – Financial Administration (FA) – to reduce administrative and compliance costs and tackle fraud and tax avoidance.
Slovakia2012-Q1/2013-Q2Other taxChangeEffective as of 1 January 2012, Slovak banks and branches of foreign banks operating in the Slovak Republic, established according to special legislation on banks, are subject to a bank levy. The levy is calculated from the bank’s liabilities at the end of the previous calendar quarter (adjusted by special items as stipulated in legislation). The current levy is set at 0.4 %. For the next years, the levy will depend on total revenue collected, subject to the following rules: 0.2% - if the total revenue collected is > 500 million EUR and ≤ 750 million EUR in the preceding year, 0.1% - if the total revenue is > 750 million EUR and < 1.45% of total amount of assets of the banking sector in the Slovak republic in the preceding year, 0% - (1) if the total amount of levies will be > 750 million EUR in the preceding year and (2) will be ≥ 1.45% of total amount of assets of the banking sector in the Slovak Republic in the preceding year, 0.05% - if (2) is fulfilled in year-2 but not in year-1. The levy is due on the 25th day of every calendar quarter. As of 1 September 2012 a special duty is paid on business income in regulated sectors: energy industry, insurance and re-insurance industry, public health insurance, electronic communications, pharmaceutics, postal services, rail traffic, public water and sewer systems, air transport and health care services. The duty is charged on companies having licenses in the regulated sectors and if the revenue from business in those sectors exceeds 50 % of their total revenues. The monthly rate 0.363 % is applied to the profit in previous year higher than EUR 3 million.
Slovenia2010-Q1/2011-Q2Personal income tax DecreaseBoth the general allowance and the investment allowance to individual entrepreneurs were extended in 2010.
Slovenia2012-Q1/2013-Q2Personal income tax ChangeFor the 2013 and 2014 tax years an additional tax bracket of 50 % was introduced for very high incomes (above EUR 70 907.20). The second bracket, 27 %, has been extended so that the 41 % bracket starts at a taxable base of EUR 18 960.28. The flat tax rate on income from capital (on interest, dividends and capital gains) has been increased to 25 %.
Slovenia2010-Q1/2011-Q2Corporate income tax DecreaseThe last stage of the reduction of the corporate income tax was implemented, resulting in a tax rate of 20 %.
Slovenia2011-Q1/2012-Q2Corporate income tax DecreaseWith the amendments to the Corporate Income Tax Law approved in April 2012 and applicable with effect from 1 January 2012, the statutory rate was reduced to 18% (from 20%) for the year 2012. Further decreases to 17% in 2013 16% in 2014, and 15% in 2015 are envisaged. The allowance for investments in equipment and intangible assets was increased from 30% to 40% , and the cap of € 30000 was abolished. Tax relief for investment in research and development was increased from 40% to 100%. Sspecial regional tax relief for investment in research and development was therefore abolished [overall, 0.3% of GDP].
Slovenia2012-Q1/2013-Q2Corporate income tax ChangeThe CIT rate has been reduced from 18 % to 17 % for 2013. The standard investment deduction for businesses has been increased from 30 % to 40 %, and the ceiling has been abolished. General R&D tax relief was increased from 40 % to 100 %. This eliminates the current regional R&D tax relief.
Slovenia2012-Q1/2013-Q2VATChangeAs of 1 July 2013, the standard rate of VAT increased by 2 percentage points (pps) to 22 % and the reduced VAT by 1 pp to 9.5 %.
Slovenia2011-Q1/2012-Q2Excise dutyDecreaseAfter the 7% increase in 2010, excises on fuel were reduced by 15% in 2011.
Slovenia2010-Q1/2011-Q2Excise dutyIncreaseExcise duties on energy and tobacco (cigarettes) and alcohol were increased by around 7 % in 2010.
Slovenia2011-Q1/2012-Q2Excise dutyIncreaseExcise duties on tobacco were increased in 2011 and 2012. Excise duties on alcohol were increased by around 10% in April 2012 [0.2% of GDP].
Slovenia2012-Q1/2013-Q2Excise dutyChangeExcise duties on alcohol and tobacco increased in 2012 and 2013 in several steps.
Slovenia2010-Q1/2011-Q2Other taxIncreaseA balance sheet tax for banks is effective since August 2011. The aim of the tax is to stimulate banks to extend loans to the non-financial sector rather than a fiscal purpose. The tax of 0.1 % is levied on the total assets of the bank, but 0.167 % of loans granted to the non-financial is deducted sector and could possibly reduce the tax due to zero.
Slovenia2011-Q1/2012-Q2Other taxIncreaseUnder the Bank Balance Sheet Tax Act adopted in July 2011 a new bank tax was introduced on 1 August 2011. The new tax is applicable to domestic banks, banks from EU Member State and banks from third countries that operate in Slovenia. The tax rate is set at 0.1% of the tax base. The tax base is the average amount of the total assets of the bank within the tax year. Under certain conditions, the amount of the tax may be reduced up to 0.167% of the loans provided to non-financial companies or private entrepreneurs.
Slovenia2012-Q1/2013-Q2Other taxChangeSpecial property taxes were introduced on immovable property of high value, taxes on motor vehicles and pleasure boats rose. The property tax on premises depends on the type and the value of the property, with progressive rates ranging from 0.1 % to 1.5 % (several exemptions apply). In 2012, an anti-crisis tax on immovable property was introduced on properties in Slovenia above a certain value (properties for commercial and business use are exempted). For 2012, the threshold was set at EUR 1 million of the property’s value. At the end of 2012, amendments were introduced for the years 2013 and 2014 lowering the threshold to EUR 500 000. Tax rates will be 0.5 % of the property’s value, if the owner’s property value is between EUR 500 000 and EUR 2 million (for residential property the tax rate is 0.25 %) and 1 % of the property’s value for immovable property worth above EUR 2 million (for residential property the rate is 0.5 %). In March 2013, a tax on financial services was introduced, set at 6.5 % of the fees received by the service provider. Tax on CO2 emissions was increased as of January 2013.
Spain2010-Q1/2011-Q2Personal income taxIncreaseMeasures to consolidate personal income tax were implemented in 2010. Phasing out of the € 400 personal income tax credit for working and self-employed taxpayers over € 12 000 of the tax base (0.5 % in 2010). The personal income tax credit of € 2 500 for each child born or adopted in the tax year is repealed in 2011 (0.25 % in 2010). Taxation of savings income by a progressive system of 19 % and 21 % (above € 6 000) from 2010 instead of a flat 18 % rate (0.07 % in 2010). The 2011 Budget also includes a number of further changes to personal income tax aimed at raising revenue. Increase in central government component of top personal income tax rate by 1 percentage point (income from € 120 000 to € 175 000) and by 2 percentage points for income above € 175 000. Elimination of the housing investment deduction in personal income tax for income over € 24 170.2 from 2011. Change in capital income taxation that cancels some deferrals from 2011.
Spain2011-Q1/2012-Q2Personal income taxIncreaseIn January 2011, the government introduced two additional tax bands/rates for taxpayers over € 120000 and € 175 000 raising the former top marginal personal income tax rate to 44% and 45%, respectively). From January 2012 the government introduced a temporary supplementary progressive levy (covering years 2012 and 2013) applied to each tax band of the general government tax base, which implies now the existence of seven brackets (24.75%, 30%, 40%, 47%, 49%, 51% and 52%). During 2012 and 2013, savings and capital gains are taxed under a progressive tax schedule with three brackets of 21% on the first € 6 000, 25% up to € 24 000, and 27% on income above (in 2011, they were taxed at 19% on the first € 6 000, and 21% on income above). [Overall, 0.4% of GDP]. (*) The withholding tax rate applied to some types of employment income and to income from professional activities is increased to 21% from 1 September 2012 to 31 December 2013. The mortgage interest deductibility for new mortgages taken for house purchases is abolished from 1 January 2013.
Spain2011-Q1/2012-Q2Personal income taxDecreaseFrom January 2012, (and with effect from 1 January 2011), the government re-introduced the 15% tax credit for the acquisition or restoration of the taxpayer's primary residence for all taxpayers, regardless on their tax base.
Spain2012-Q1/2013-Q2Personal income taxChangeAs of January 2013, lottery prizes of EUR 2 500 or more are subject to a 20 % special charge and short-term capital gains are excluded from the savings tax schedule and taxed under the progressive tax scale. For the period 1 September 2012 to 31 December 2013, withholding tax on payment for professional activities has been increased from 15 % to 21 %, and to 9 % (from 7 %) for the first three years of activity. From 1 January 2014, the rate will be 19 %. As from January 2013, the tax credit for the acquisition or restoration of the taxpayer’s primary residence was abolished, though acquisitions prior to that date still benefit. Individual entrepreneurs with a turnover of less than EUR 5 million and fewer than 25 employees may deduct 20 % of their positive net income. The same reduction applies for the first two years of new entrepreneurial activities, and an exemption for lump-sum unemployment benefit is granted to those making use of such income to work in self-employment for at least five years or to contribute to labour companies, labour cooperatives or companies provided that they maintain the holding for five years.
Spain2011-Q1/2012-Q2Corporate income tax IncreaseIn March 2012 measures were introduced intended to increase the effective taxation of corporate (including hidden) income, such as: the deferral of tax benefits for goodwill arising from acquisitions and business restructuring operations (for which the annual deductibility limit is one hundredth of the amount), a permanent limit to the deductibility of interest expenses (30% of the operating profits), reduction to 25% (from 35%) of the limits to the deductions aimed at promoting certain activities (e.g. R&D); permanent limits to the "free depreciation" regime (introduced in 2010) for large companies, while for small and medium business "free depreciation" is linked to job creation (for assets acquired before 31 March 2012 the incentive applies with certain limitations); a special 8% tax on qualifying foreign dividends and income derived from the transfer of foreign companies operating in tax havens or similar jurisdictions. (*) Following the measures introduced with Royal Decree-Law 12/2012 of 30 March 2012, further important reforms have been introduced with Royal Decree – Law 20/2012 of 13 July 2012, such as: a new special tax of 10% applicable to dividends and capital gains that do not qualify for participation exemption; limits to the loss carry forward applicable in 2012 and 2013 (50% - instead of 75% - for companies with net turnover between € 20 and 60 million; 25% - instead of 50% - above € 60 million). Rates for the payment on account are increased to 23% (from 21%) if net turnover is between € 10 and 20 million; to 26% (from 24%) if turnover is between € 20 and 60 million; to 29% (from 27%) if turnover is at least € 60 million. In the calculation of the payment on account 25% of the dividends and capital gains accrued should be included. The minimum payment on account rate for companies with turnover above € 20 million is set at 12% (previously 8%). [Note: Measures indicated with (*) were taken after the cut-off date]
Spain2010-Q1/2011-Q2Corporate income tax DecreaseBroadening of the application of the SMEs tax regime (e.g. higher ceiling for turnover and taxable amount, longer application period of three years after relaxing of conditions).
Spain2011-Q1/2012-Q2Corporate income tax DecreaseIn Spain several measures took place for encouraging investment and employment from 1 January 2011. The annual turnover threshold to be included within the scope of the special regime for small and medium sized enterprises (SMEs) increases from € 8 million to € 10 million. Moreover, the taxable amount taxed at the reduced tax rate has been increased from € 120 202 to € 300000. Companies that have less than 25 employees and a turnover below € 5 million are taxed on their annual profits below € 300000 at 20%; annual profits above this threshold are taxed at 25%. As part of additional measures taken in the course of 2011, the loss carry forward period was increased from 15 to 18 years for all companies. At the same time, the amount of losses to be carried forward was limited for big companies for the tax years 2011-2013 (to 75% for companies with turnover between € 20 million and 60 million and 50% for companies with higher turnover.
Spain2012-Q1/2013-Q2Corporate income tax ChangeThere are new ceilings on deductibility of depreciation; the special free depreciation initially planned for the period 2011–15 has been abolished and new ceilings on deduction of the net financial costs of corporate groups and associated companies, on the deduction of financial goodwill and on offsetting the losses of large companies have been introduced. For 2013 and 2014, tax depreciation for large companies is limited to 70 % of the deductible amount. Dividends and capital gains from shares in holdings in non-resident companies established in low-tax jurisdictions that are not subject to the foreign source income exemption are subject to a special charge of 8 % in 2012, 10 % in some cases until 30 November 2012. The reduced rate for smaller companies linked to employment has been extended to 2013 and a revaluation of balance sheets is being offered with a special levy of 5 % on the net increased value. The tax credit for employee training in new technologies has been extended to 2013 and the tax credits for investment in books and films are being extended to 2014. From January 2013, new corporate start-ups will be subject to a 15 % tax rate on their annual profits under EUR 300 000, and 20 % on the excess as of the first and second year in which profits arise. From 2011 to 2013, companies with fewer than 25 employees and a turnover below EUR 5 million are being taxed on their annual profits below EUR 300 000 at 20 %; above this threshold they are taxed at 25 %. Companies that no longer qualify as SMEs will nevertheless be able to apply the scheme for three years following the loss of their SME status.
Spain2011-Q1/2012-Q2VATDecreaseAt the end of 2011, the application of the super-reduced 4% VAT to the acquisition of new dwellings was extended by one year.
Spain2010-Q1/2011-Q2VATIncreaseIncrease in general VAT rate by 2 percentage points to 18 % and a 1 percentage point reduction to 8 % from July 2010 (0.25 % in 2010, around 0.5 % of GDP in 2011).
Spain2011-Q1/2012-Q2VATIncrease(*) From 1 September 2012 the standard and reduced VAT rates are increased to 21% and 10% (from 18% and 8%, respectively). In addition, the standard rate applies also to some goods and services (e.g. combined hotel and catering, entertainment, discotheque and night-club services, cinema and theatre tickets, supply and receipt of digital radio broadcasting and digital television services) previously taxed at the reduced rate. [Note: Measures indicated with (*) were taken after the cut-off date]
Spain2012-Q1/2013-Q2VATChangeWith effect from 1 September 2012, the standard rate of VAT increased from 18 % to 21 %, the reduced rate increased from 8 % to 10 % and several categories of goods previously subject to the 8 % reduced rate are now subject to the standard rate. As of January 2013, house purchases have been moved from the 4 % super-reduced rate to the 10 % reduced rate.
Spain2012-Q1/2013-Q2Social security contributionChangeFrom 2013, the maximum monthly base is EUR 3 425.70 (an increase of 1 %); the minimum varies depending on the type of work (ranging from EUR 753 to EUR 1 051.50 per month).
Spain2010-Q1/2011-Q2Excise dutyIncreaseA Royal Decree in late 2010 included an increase in excise duties for cigarettes and other types of tobacco (€ 780 million annual revenue increase).
Spain2011-Q1/2012-Q2Excise dutyIncreaseFrom January 2012 the tax on diesel for professional use was increased, reducing the amount for partial refunds. (*) Tobacco excises are increased and their structure is modified by reducing the proportional rate and raising the specific one. The minimum tax rate for cigarettes has been fixed at € 119.1 per 1000 units. [Note: Measures indicated with (*) were taken after the cut-off date]
Spain2012-Q1/2013-Q2Excise dutyChangeTobacco tax rates were raised in March, July and December 2012. Tobacco taxes have been rebalanced in June 2013 by increasing the specific component and reducing the proportional one. Alcohol taxes (except beer and wine) have been increased by 10% in June 2013. In 2013, three new taxes were created: a tax on the sale of electric energy, a nuclear tax and a tax on the storage of radioactive waste. The zero rate applying to non-fuel uses of liquid petroleum gas (LPG) has been abolished. They will be taxed at the rate of EUR 15 per tonne.
Spain2011-Q1/2012-Q2Other taxIncreaseFrom January 2012 a temporary surcharge (up to 2013) applies in the Real Estate Tax (municipal tax) for immovable properties with an updated cadastral value over the average value in each municipality. In September 2011, the net wealth tax (impuesto sobre el patrimonio) was temporarily restored for the years 2011 and 2012. The exemption for dwelling houses was nearly doubled to € 300000 (previously € 150 253.03) and the tax-free amount (after application of specific tax exemptions) was substantially increased to € 700000 (previously: € 108 182.18). A special programme was approved to encourage regularisation of the tax status concenring personal and corporate income.
Spain2012-Q1/2013-Q2Other taxChangeThe wealth tax levy has been extended to 2013. The Budget Law set a legal interest rate for money at 4 % and a late payment interest rate at 5 % for 2013. Several taxes on electricity generation are being applied from 2013. The creation of an Office for Fiscal Responsibility (also planned for 2013) is expected to enhance fiscal monitoring and transparency.
Sweden2010-Q1/2011-Q2Personal income taxDecreaseIn 2010, the fourth stage of the earned-income tax credit was introduced. Including the fourth stage, the EITC has reduced the tax on earned income by a total of SEK 71 billion (€ 7.84 billion). The Budget Bill for 2011 included an increase in the basic allowance for individuals over 65 years old. The estimated tax reduction is around SEK 7.5 billion (€ 828 million) in 2011.
Sweden2011-Q1/2012-Q2Personal income taxDecreaseFrom January 2011 the basic income tax allowance was increased for people over 65 [0.2% of GDP].
Sweden2012-Q1/2013-Q2Personal income taxChangeThe budget bill for 2013 introduced a further increase in the basic tax allowance for individuals over 65 years old and tax incentives for investment in new companies. Further, the scope of reduction for household services was expanded. Tax relief for foreign key personnel was reformed and simplified in 2012. Investment savings account was introduced in 2012.
Sweden2012-Q1/2013-Q2Corporate income tax ChangeThe budget bill reduced the CIT statutory rate by 4.3 percentage points from 26.3 % to 22 %.
Sweden2011-Q1/2012-Q2VATDecreaseFrom 2012 the VAT on restaurant and catering services was reduced by 13 pp to 12% [0.2% of GDP].
Sweden2012-Q1/2013-Q2VATChangeNo change in 2013. Since 2012, Sweden has applied a reduced VAT rate to restaurants and catering services.
Sweden2011-Q1/2012-Q2Excise dutyIncreaseIn 2012 the excise duty on tobacco was increased and annual indexation was introduced, corresponding to a total tax increase of roughly 10%.
Sweden2012-Q1/2013-Q2Excise dutyChangeExcise duties on energy products partly obtained from biomass have been reduced. Excise duties on tobacco has been raised since 2012.
Sweden2012-Q1/2013-Q2Other taxChangeThe tax deduction for rental income increased. Property tax on apartment buildings has been lowered.
United Kingdom2010-Q1/2011-Q2Personal income taxIncreaseIncrease in tax progression via higher tax allowances and an additional top rate. From April 2010, an additional rate of income tax of 50 % applies to income over GBP 150 000. Personal income tax allowance was restricted for annual incomes over GBP 100 000 from April 2010. From April 2011, tax relief on pension contributions is restricted for those with incomes of GBP 150 000 and over, and tapers down until it reaches 20 %.
United Kingdom2011-Q1/2012-Q2Personal income taxIncreaseFor the fiscal year 2012-13 the basic rate limit was lowered to GBP 34 370 (from GBP 35 000 in 2011-2012). The personal tax allowance was increased to GBP 8 105. Since the 2010-11 tax year, this personal allowance is reduced for income over GBP 100000 - by GBP one for every GBP two of income over GBP 100000. This reduction applies irrespective of age. From April 2011 the annual allowance for tax-privileged pension saving was reduced from GBP 255 000 to GBP 50000. From April 2013 the availability of the income tax age-related allowances will be restricted for current recipients and a cap on all unlimited income tax reliefs will be introduced through a ceiling of GBP 50000 or 25% per cent of income, whichever is higher. From January 2013 the child benefit will be withdrawn through an income tax charge applicable only to households with someone earning over GBP 50000 a year; the withdrawal will be gradual for households with someone earning between GBP 50000 and GBP 60000.
United Kingdom2011-Q1/2012-Q2Personal income taxDecreaseFrom April 2013, the personal tax allowance will increase to GBP 9 205, and the additional rate of income tax (applicable above GBP 150000 since 2010) will decrease from 50% to 45% [-0.23% of GDP].
United Kingdom2012-Q1/2013-Q2Personal income taxChangeIn March 2013 (the 2013 budget), a new tax-free childcare scheme worth up to GBP1 200 per child under 12 (20 % of working families’ childcare costs) was announced. It will be phased in from autumn 2015 and will ultimately be open to around 2.5 million families with children under 12. Parents who receive childcare support, at present through tax credits and in due course through universal credit, will see this support increased. The additional GBP 200 million in support is planned to be phased in from April 2016 and is equivalent to covering 85 % of the childcare costs of qualifying households where the lone parent or both earners in a couple pay income tax. In addition, the upper limit on the basic (20 %) PIT rate will be lowered from GBP 34 370 (EUR 39 602) in 2012–13 to GBP 32 010 (EUR 36 883) in 2013–14. The tax-free personal allowance will be increased by GBP 1 335 (EUR 1 538) to GBP 9 440 (EUR 10 877) for 2013–14. For 2014-15, the basic personal allowance will be GBP 10 000 and the basic rate limit will be reduced to GBP 31 865. The capital gains tax relief on reinvesting gains in SEIS (seed enterprise investment scheme) shares will be extended. The Finance Bill 2013 restricts the trading losses that can be set off against general income to the greater of either (i) GBP 50 000, or (ii) 25 % of the individual’s adjusted total income for that tax year. In addition, the limit also affects other reliefs including early years’ trading losses (i.e. the first four assessment years of trading), and post-cessation trade relief (granted for a seven-year period after cessation). The restriction is stated to take effect from 2013-14. The annual allowance for tax-privileged pension saving will be reduced from GBP 50 000 to GBP 40 000 (EUR 46 089) as from 2014–15. The lifetime allowance for tax-privileged pension saving will be reduced from GBP 1.5 million (EUR 1.73 m) to GBP 1.25 million (EUR 1.44 m) as from 2014-15.
United Kingdom2010-Q1/2011-Q2Corporate income tax DecreaseIn 2011, the standard and reduced corporate income tax rates have been reduced by 1 percentage point to 27 % and 20 % respectively. The government aims to further decrease the standard rate by 1 percentage point annually until it reaches 24 %.
United Kingdom2011-Q1/2012-Q2Corporate income tax DecreaseFrom April 2011 the headline and small profits rates were reduced from 28% to 26% and from 21% to 20% From April 2012 the standard CIT rate was reduced further to 24% [0.03% of GDP]. The SME tax relief rate for investment was increased to 200% in April 2011, and further to 225% in April 2012. A special regime introducing a reduced 10% rate on corporate profits from patents and other types of intellectual property (Patent Box) will be phased in over five years from April 2013. An 'Above the Line' (ATL) credit for R&D with a minimum rate of 9.1% before tax will be introduced.
United Kingdom2012-Q1/2013-Q2Corporate income tax ChangeFor the 2013 financial year (i.e. from 1 April 2013 to 31 March 2014), the corporation tax rate is 23 %. The Finance Bill 2013 provides that the corporation tax rate for the financial year 2014 (i.e. from 1 April 2014 to 31 March 2015) will be 21 % and 20 % for financial year 2015 (i.e. from 1 April 2015). For the financial year 2012, the main rate of corporation tax was 24 %. From April 2013, large companies are able to claim an ‘above the line’ credit for their R&D expenditure — this will be fully refundable to companies with no corporation tax liability. Initially, the credit will be available upon election, but it will become mandatory by April 2016. The credit will be equivalent to 10 % of qualifying expenditure. Regarding the ‘patent box’ incentive for innovation, from April 2013, 60 % of profits attributable to qualifying intellectual property is taxed at a rate of 10 %. This proportion of the profits will be increased annually, rising to 100 % in 2017. In January 2013, the Annual Investment Allowance (AIA) has been increased from GBP 25 000 to GBP 250 000 for two years for qualifying investment in plant and machinery.
United Kingdom2010-Q1/2011-Q2VATIncreaseIn 2011, the standard VAT rate has been increased from 17.5 % to 20 % (between 1 December 2008 and 31 December 2009 the rate had been temporarily lowered to 15 %).
United Kingdom2011-Q1/2012-Q2VATIncreaseFrom 2011 the standard VAT rate was increased from 17.5% to 20%.
United Kingdom2012-Q1/2013-Q2VATChangeUnder the Finance Bill 2013, VAT registration and deregistration thresholds will be increased in line with inflation.
United Kingdom2011-Q1/2012-Q2Social security contributionIncreaseIn April 2011 the main and additional rates of National Insurance Contributions (NICs) were increased by one percentage point.
United Kingdom2012-Q1/2013-Q2Social security contributionChangeThe Finance Bill 2013: effective from April 2014, all businesses and charities will be entitled to an allowance of GBP  2 000, to be offset against their employer Class 1 national insurance contributions.
United Kingdom2010-Q1/2011-Q2Excise dutyIncreaseSeveral environment-related taxes have increased, such as air passenger duty or landfill taxes.
United Kingdom2011-Q1/2012-Q2Excise dutyIncreaseThe general duty rates on alcohol and tobacco were increased by 2% above inflation in March 2011. They were increased by a further 2% (alcohol) and 5% (tobacco) above inflation in March 2012. The fuel duty escalator was abolished and replaced by a fair fuel stabiliser. this means that fuel duty now increases in line with inflation when oil prices are high. When the price of oil falls below a certain level, fuel duty increases by inflation plus GBP 0.01 per litre.
United Kingdom2012-Q1/2013-Q2Excise dutyChangeThe duty escalator has been scrapped and general beer duty reduced by 2 %. Other alcohol and tobacco duty rates increased by 2 % above inflation in March 2013. Gaming duty was adjusted in line with inflation from 1 April 2013. A planned increase on fuel duty as from 1 September 2013 was scrapped.
United Kingdom2010-Q1/2011-Q2Other taxIncreaseA bank levy and a one-off bank payroll tax (i.e. bonus tax) of 50 % on bonuses over GBP 25 000 paid by banks and building societies between 9 December 2009 and 5 April 2010. In October 2010, the government also announced that it would consider the pros and cons of introducing a FAT.
United Kingdom2011-Q1/2012-Q2Other taxIncreaseWith effect from January 2012 the bank levy full rate was increased from 0.078% to 0.088% Another increase to 0.105% is scheduled for January 2013. Since 22 March 2012, a new 7% rate of the stamp duty land tax (increased to 15% if the buyer is a non-natural person) applies to the purchase of residential property worth over GBP two million. The government set up an independent Office of Tax Simplification and in Budget 2012 it announced a consultation on a new general anti-abuse rule (GAAR) to tackle artificial and abusive tax avoidance.
United Kingdom2012-Q1/2013-Q2Other taxChangeThe Finance Bill 2013 contains measures to introduce an annual tax on enveloped dwellings (ATED). This is a charge on UK residential properties valued at over GBP 2 million, where such properties are owned by certain non-natural persons. The legislation is effective from 1 April 2013. The Finance Bill 2013 also proposes a capital gains tax charge of 28 % on the disposal of residential property subject to the ATED. The measure is effective from 6 April 2013. With effect from 1 January 2013, the bank levy rates have increased both for (i) chargeable equity and long-term chargeable liabilities (0.065 %) and (ii) short-term chargeable liabilities (0.130 %). The Finance Bill 2013 provides that, with effect from 1 January 2014, the rates will increase to 0.071 % and 0.142 %, respectively. New resources will be made available from 2013 to combat tax evasion and avoidance, including the launch of a comprehensive offshore tax evasion strategy, coordination on international taxation rules, e.g. on transfer pricing, and the introduction of the UK’s first General Anti-Abuse Rule (GAAR). The scope of Air Passenger Duty will be extended in 2013 to include business jets. From 1 April 2014, climate change levy rates will be increased in line with inflation. The standard rate of landfill tax will increase by GBP 8 per tonne to GBP 80 per tonne. for disposals of waste made, or treated as made, to landfill, on or after 1 April 2014. The lower rate will be frozen for 2014-15 at GBP 2.50 per tonne.