Tax rate

The tax rate (or tax burden rate ) is an economic or economic key figure that reflects the share of one type of tax or the sum of all taxes ( tax revenue ) in another economic variable.

General

Tax ratios enable financial analysts and the public to assess how a certain type of tax affects total tax revenue or the total tax revenue on individual economic subjects ( households , companies or the state ). The different tax rates result from using different aggregates in the denominator . This is the wage tax rate when the total wage tax revenue of a state is compared to the total tax revenue : ${\displaystyle LSt_{q}}$ ${\displaystyle LSt}$ ${\displaystyle T}$

${\displaystyle LSt_{q}={\frac {LSt}{T}}}$.

The tax rate allows a comparison of the tax burden of employees , entrepreneurs or economies with each other and over time, the business tax rate indicates the proportion of corporate taxation of a company in relation to its annual surplus and the municipal tax rate measures the proportion of tax revenue of a regional authority in relation to total revenue of this regional authority (e.g. tax income of a municipality in relation to all income of the municipality such as contributions , fees , municipal taxes ).

The tax rate of a state is calculated accordingly by comparing the total state income from taxes with the gross domestic product (or gross national income ): ${\displaystyle St_{q}}$ ${\displaystyle E_{T}}$ ${\displaystyle BIP}$

${\displaystyle St_{q}={\frac {E_{T}}{BIP}}}$.

This makes it possible to compare internationally whether a country is a low- tax country ( tax haven ) or a high-tax country . In the latter case, the tax rate is significantly higher than the average for other countries.

Economic tax rate

The economic tax rate is influenced by the tax rate and tax exemptions , tax loopholes and undeclared work . Some equate a high tax rate with extensive state redistribution , a lack of economic incentive effects and the low attractiveness of the location due to high ancillary production costs, which can lead to international tax competition . With a given, unchanged tax law and tax system , the tax burden ratio is proportional to the business cycle . If the quotient is greater than 1, the elasticity of the supply increases over the course of the business cycle.

However, the tax rate only gives a rough indication of the total burden on an economy. It says nothing about the distribution of the tax burden. This is u. a. by taxable events, tax exemptions , the ability of taxpayers to pass on their tax burden , the relationship between direct and indirect taxes and tax progression . The tax burden quota is included as a component in the consideration of the state quota , which also includes the economic activities of, for example, state-owned companies such as railway companies , post offices , telecommunications , energy supply companies , motorway operators , etc.

calculation

The pure tax rate only takes into account the actual tax revenue of the state, but not state relief ( depreciation , loss offsetting ), subsidies ( tax subsidies ) or benefits to taxpayers ( BAföG , child benefit , allowances or other transfer payments ). When it comes to corporate taxation, it must be taken into account that in some countries taxable corporations not only have to pay their profit-related taxes to the central government, but also to local authorities (Germany: corporation tax to the state, trade tax to the municipalities, also in Italy , Japan , Canada , Luxembourg , Portugal , Hungary ; Switzerland : Canton of Zurich and USA : New York State ). In addition to taxes, the tax rate also takes into account other contributions ( social contributions ) to the state, which is why the tax rate is always higher than the tax rate, unless social security contributions do not have to be paid, in which case the tax and contribution rates are identical.

statistics

Tax rate in Germany

Development of the tax rate since 1950

year	Total taxes (billion euros)	Cash tax rate (% of GDP)	Tax rate according to national accounts (% of GDP)	Tax rate according to OECD (% of GDP)
1950	010.78	21.70%	nv	nv
1955	021.64	24.94%	nv	nv
1960	035.00	22.61%	nv	nv
1965	053.92	22.97%	nv	23.1%
1970	078.80	22.40%	23.0%	22.0%
1975	123.80	22.46%	nv	22.6%
1980	186.60	24.30%	23.8%	23.9%
1985	223.50	22.71%	nv	22.9%
1990	281.00	22.70%	21.6%	21.8%
1995	416.30	22.50%	21.9%	22.7%
2000	467.30	22.70%	24.2%	22.7%
2001	446.20	21.10%	22.6%	21.7%
2002	441.70	20.60%	22.3%	nv
2003	442.20	20.40%	22.3%	nv
2004	442.80	20.00%	21.8%	20.7%
2005	452.10	20.10%	22.0%	20.9%
2006	488.40	21.00%	22.8%	21.9%
2007	538.20	22.20%	23.8%	22.9%
2008	561.20	22.50%	23.7%	23.1%
2009	524.00	21.86%	23.4%	22.9%
2010	530.60	21.23%	-	22.0%
2011	573.40	-	-	22.7%
2012	600.00	-	-	23.2%
2013	620.50	-	-	-

(a) estimate; Status: BMF, monthly report, tax ratios in international comparison , February 2018

International

The tax rate and the tax rate were as follows internationally in 2016:

country	Tax rate 2016 in%	Tax rate 2016 in%
Ireland	19.1	23.0
United States	19.8	26.0
Switzerland	21.0	27.8
Latvia	21.9	30.2
Slovenia	22.3	37.0
Luxembourg	26.4	37.1
Germany	23.4	37.6
Norway	27.4	38.0
Greece	27.6	38.6
Netherlands	24.0	38.8
Hungary	25.8	39.4
Austria	27.8	42.7
Italy	29.9	42.9
Sweden	34.1	44.1
Finland	34.4	44.1
Belgium	30.5	44.2
France	28.5	45.3
Denmark	45.9	45.9

Only in the high-tax country of Denmark are the tax and contribution rates identical. The discrepancy between tax and contribution rates is particularly high in Slovenia, Luxembourg, Germany, the Netherlands, Hungary, Austria, Italy, Belgium and France.

International comparison of tax rates

country	1965	1975	1985	1990	1995	2000	2005	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Germany (c)	23.1%	22.6%	22.9%	21.8%	22.7%	22.8%	21.0%	22.9%	23.1%	22.9%	22.0%	22.7%	22.5%	22.9%	22.9%	23.1%	23.4%
Belgium	21.3%	27.6%	30.3%	28.0%	29.2%	30.9%	30.9%	30.1%	30.2%	28.7%	29.4%	29.9%	30.0%	30.8%	30.8%	30.5%	30.5%
Denmark	28.8%	38.2%	44.8%	45.6%	47.7%	47.6%	49.7%	47.9%	47.1%	47.1%	47.2%	47.1%	47.1%	45.8%	48.5%	45.8%	45.9%
France	22.5%	21.1%	24.3%	23.5%	24.4%	28.4%	27.8%	27.5%	27.3%	25.7%	26.3%	27.4%	28.3%	28.5%	28.4%	28.5%	28.5%
Greece	12.2%	13.7%	16.4%	18.3%	19.5%	23.6%	20.6%	20.9%	20.5%	19.8%	20.0%	20.9%	23.1%	25.5%	25.4%	25.7%	27.6%
Italy	16.8%	13.7%	22.0%	25.4%	27.5%	30.2%	28.3%	30.4%	29.8%	29.7%	29.5%	29.6%	30.9%	30.9%	30.5%	30.3%	29.9%
Japan	14.1%	14.7%	18.9%	21.3%	17.8%	17.5%	17.3%	18.0%	17.4%	15.9%	16.3%	16.8%	16.5%	17.1%	18.3%	18.6%
Luxembourg	18.8%	23.1%	29.1%	26.0%	27.3%	29.1%	27.1%	25.8%	25.5%	26.4%	26.3%	26.0%	26.8%	27.1%	26.8%	26.2%	26.4%
Norway	26.1%	29.5%	33.8%	30.2%	31.3%	33.7%	34.6%	34.5%	33.9%	32.8%	33.1%	33.0%	32.6%	30.4%	28.9%	27.8%	27.4%
Austria	25.4%	26.5%	27.8%	26.6%	26.5%	28.4%	27.7%	27.7%	28.5%	27.8%	27.5%	27.8%	28.3%	28.3%	28.4%	29.0%	27.8%
Sweden	29.2%	33.2%	35.6%	38.0%	34.4%	37.9%	35.8%	35.0%	34.9%	35.2%	34.1%	34.1%	34.0%	32.9%	32.7%	33.6%	34.1%
Switzerland	14.9%	19.0%	19.9%	19.7%	20.2%	22.7%	22.1%	21.2%	21.6%	21.9%	21.4%	21.6%	21.1%	19.4%	18.6%	19.0%	19.4%
United Kingdom	25.7%	28.8%	30.4%	29.5%	28.0%	30.2%	29.0%	29.4%	28.9%	27.6%	28.2%	29.1%	28.4%	26.5%	26.2%	26.4%	26.9%
United States	21.4%	20.3%	19.1%	20.5%	20.9%	22.6%	20.5%	21.4%	19.8%	17.6%	18.5%	19.4%	18.9%	19.5%	19.7%	20.0%	19.8%

(c) Not comparable with quotas in the definition of national accounts or German financial statistics.

Tax ratios of listed companies

Business tax rate

The taxes at the place of business of a company influence its choice of location , so that especially multinational corporations relocate their place of business from high-tax countries to low-tax countries or tax havens. That is why the tax rate is an important economic indicator.

In companies, the business tax rate records the percentage of income taxes to be paid by a company (not cost taxes ) in the pre-tax profit : ${\displaystyle T_{r}}$ ${\displaystyle E_{s}}$ ${\displaystyle EBT}$

${\displaystyle T_{r}={\frac {E_{s}}{EBT}}}$.

Income taxes are only incidentally proportional to the annual surplus because some business transactions are to be taken into account in the annual surplus under commercial law, but not in tax law and vice versa. For example, some provisions only reduce the annual surplus under commercial law ( provisions for impending losses are not permitted under Section 5 (4a) EstG ), but not those under tax law. As a result, more income taxes are payable than would be payable under commercial law. According to the German Commercial Code (HGB) and also according to IFRS , a distinction must be made between the resulting differences in equity between the commercial and tax balance sheets and the deferred tax balance sheet item must be formed in the commercial balance sheet .

Empirical results

For listed companies, company tax rates can be determined quite easily using the published consolidated balance sheets. The figure on the right shows the tax ratios of listed companies worldwide. It becomes clear that many countries are in a “race to the bottom” when it comes to tax legislation. The tax rates of companies have been roughly halved internationally in the last 20 years! The development in the USA is particularly striking. After the tax reform in 2018, many US companies only have a tax rate of around 20%. The "Internet giants" manage to reduce the tax burden the most. Against this background, Germany, with an average tax rate of around 27%, can almost be considered a high-tax country again.

literature

• Literature on tax rates in the catalog of the German National Library

See also

• List of countries by tax rate

Individual evidence

1. ↑ Monthly report of the BMF, April 2010 ( Memento from July 5, 2010 in the Internet Archive ) (PDF) p. 85, table 8
2. ↑ Historical time series BMF
3. ↑ Monthly report of the BMF, April 2010 ( Memento of July 5, 2010 in the Internet Archive ) (PDF) p. 93, table 09
4. ↑ Tax rates in an international comparison 1965–2010. BMF
5. ↑ OECD (ed.), Revenue Statistics 1965-2016 , Paris, 2017
6. ↑ BMF, monthly report, tax ratios in international comparison , February 2018
7. ↑ Heinz Kußmaul , Business Taxation , 2008, p. 650
8. ↑ José A. Campos Nave, The income tax-neutral and identity-preserving relocation of the GmbH in member states of the European Union , 2009, p. 16 f.
9. ↑ Hans-Ulrich Krause / Dayanand Arora, Controlling-Kennzahlen - Key Performance Indicators , 2010, p. 93
10. ↑ Peter Seppelfricke: company analyzes . Schäffer-Poeschel, 2019, ISBN 978-3-7910-4435-4 , pp. 256 ( schaeffer-poeschel.de [accessed on February 5, 2020]).

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