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Who pays the most tax in the EU?

Have you ever wondered how much tax you’re paying compared to other countries? This infographic from the European Parliament might help you find out.

It shows a varied picture across the Union, in terms of tax rates, types of tax and the revenue generated by the tax system.

What is it telling us?

The data, from between 2012 and 2017, shows several interesting trends across the EU.

As a percentage of gross domestic product, Denmark collects the most tax at nearly 50%. Interestingly, compared to other countries, a much larger proportion of this was from indirect taxes.

The Nordic nations all return high levels of tax revenue as a percentage of GDP. Sweden and Finland both have figures of around 44%. Europe’s biggest economies also return high tax revenues as a percentage of GDP generally 40% or more with the exception of the UK.

An east/west split emerges when it comes to the importance of indirect versus direct taxes. Western European nations broadly see higher revenues from indirect taxes, while in the east of the continent the opposite is true.

Does the EU have a role in taxation?

While the EU has no direct role in setting taxes, the interdependence of European economies, as well as the principles of free movement and non-discrimination, means the Union does oversee national rules.

Understanding taxation across the continent is important to ensure taxes within the Eurozone and single market are fair, says the EU.

However, EU decisions on tax matters require unanimous agreement by all member governments. This ensures that the interests of every single EU country are taken into account.

So while how much tax you pay is decided by your government, if you live in the EU, the situation across the continent is certainly important.

Income tax is a constant source of controversy and debate, no matter what country you live in. Should 5% appear too small, be thankful I don’t take it all … You’re working for no one but me, sang the Beatles in their 1966 hit Taxman, in an attack on the then Labour government’s high tax rates.

The amount of income tax you pay varies wildly between countries, from almost 60% for high earners in certain countries to 0% in some offshore havens and oil-rich nations.

So, which countries take the biggest slice of their workers’ earnings? The table below shows the top 15 countries for marginal personal income tax rates in 2014, as well as selected Nordic and G7 nations.

Sweden tops the list with a whopping tax rate of 56.86%, followed closely by Nordic neighbour Denmark (56.22%), France (54.01%) and Spain (52%).

For an in-depth look at how business tax rates (rather than personal income tax) vary around the world and what this means for a country’s level of competitiveness, take a look at the picture above.