No national economy can exist without a tax system. And the more logical and orderly it is, the more understandable it will be for ordinary taxpayers and businessmen. The tax system of European countries is different from the Russian system, some types of taxes may seem specific, and tax rates are high. Taxes in Europe attract some businessmen, others force them to close their own businesses, someone is forced to buy an expensive car, and someone has to give up the opportunity to become a homeowner.
Features of taxation
What taxes are paid in Europe? There is no unity in tax rules and in the taxation system in Europe. Attempts have been made to convince members of the European Union to establish a single corporate tax rate. But it was not possible to equalize the rate for Europe and it is unlikely to ever be possible. The list of European countries includes more than forty states, each with its own tax legislation. In addition to the usual taxes for Russians, such as land or transport taxes, Europeans are forced to pay a salt tax or a fire protection tax. At the same time, European taxpayers have to “feed” immigrants.
What are taxes on income in Europe
Income tax varies by country. Almost half of the earnings will have to pay to the budget of the Austrians. However, the highest income tax in Europe is not only in Austria, but also in the UK.
For income received at home and abroad, Italians are forced to pay personal income tax from twenty-three to fifty percent. Up to thirty-five percent is the income tax in Malta and Cyprus, slightly higher in Greece - forty-five percent.
No personal income tax has been introduced in the Principality of Monaco.
Property Tax in Europe
Taxes in Europe apply to foreign guests. Some European countries simplify the issuance of a residence permit when buying real estate. Such investments can simplify the acquisition of citizenship.
In Austria, real estate tax does not exceed fourteen percent of its value. But a foreigner will also have to pay a land tax each year.
What are the taxes in Europe? In Bulgaria, city governments independently calculate the rate. The highest in Sofia is about three percent.
In the UK, five hundred to a thousand pounds per year will amount to a land tax. Moreover, the land may not be in possession. A tax of seven thousand pounds per year begins for land owners.
In Hungary, mostly property tax is paid by the owners of spa buildings.
The amount of tax in Greece depends on the year when the building permit was issued. Deductions amount to three percent, if the object was commissioned before January 2006, later than this date - VAT is already rising to twenty-three percent. The rate for apartment buildings - from two to twelve euros, for real estate in the countryside for a dozen hundred parts - three to ten euros.
In Spain, the amount of annual tax depends on the value of the property, mainly from two hundred to a thousand euros.
If an object costs less than one hundred and seventy thousand euros, in Cyprus it is not taxed.
In Monaco, individuals do not pay annual tax, as do the Maltese. But in Malta, a land tax of fifty to two hundred and fifty euros per year is required.
In Switzerland, property owners are required to pay 0.2-0.6% of the cadastral value of the property.
Transport tax
Taxes in Europe do not have unity in transport taxation.In general, vehicle power and carbon dioxide emissions are taken into account. France has more CO emissions2, the higher the amount. In Germany, they abandoned their system of calculating the transport tax and also switched to such a scheme: the tax depends proportionally on carbon dioxide emissions and the volume of the car's engine.
For UK drivers, the vehicle tax takes into account the model of the car, its age, engine size and exhaust frequency.
In Denmark, the highest transport tax in Europe, can grow up to one hundred and seventy percent of the cost of a car when buying. However, Denmark has the lowest CO emissions.2. It is believed that this transport tax forces the Danes to purchase environmentally friendly cars, and to dispose of old and too polluting air.
In the Netherlands, they are trying a new system: a voluntary transition to the calculation of tax per kilometer. Special sensors in cars consider mileage, which will affect the final calculation of the tax amount. The Netherlands also has low levels of environmental pollution.
VAT in Europe
Indirect tax countries establish, without consulting with each other. Therefore, in the European VAT there are no collective values. And this is very positive for businessmen. They can open a business in the country of the European Union with the most favorable taxation system.
However, the rules for calculating indirect tax in Europe are developed. At least fifteen percent is the standard rate. However, a preferential or even zero rate is distributed for some goods.
High VAT rates
The high basic VAT rate in the EU has grown to twenty-seven percent. Such deductions to the state budget have to be made to the citizens of Hungary.
Sweden, Norway, Denmark, Finland and Ireland lowered their preferential rate to eight to ten percent, fixing the principal at twenty three to twenty eight percent.
Average VAT Rates
In most European countries, businesses operate with a basic rate of value added equal to twenty percent. But the average rates are different: from ten percent in Latvia, Serbia, Slovakia, the Czech Republic, Austria, Belgium and Estonia.
Great Britain shows great loyalty. In order to attract foreign investors, the country allows the easy receipt of a residence permit to wealthy guests, provided that they invest in the state economy from two to ten million pounds.
Spain also has its own special offer for investors: from 500,000 to one million euros for the right to obtain a residence permit.
Attractive VAT rates
In Europe, a loyal tax system for businesses is one that holds the base rate no more than nineteen percent. These are Malta, Germany, Turkey, Cyprus and Montenegro.
Moreover, in Malta, the conditions for businessmen are the most favorable in Europe. The benefits and the opportunity to optimize company taxes can be achieved by a foreign businessman by becoming a citizen of Malta through investment in its economy.
Lowest VAT Rates
Eight and seven and a half percent are the lowest basic rates in Switzerland and Liechtenstein. However, the principality is so small, it is not interested in investment. Switzerland, however, can give the green light to a foreign business project, but only by all means a useful economy. A Swiss residence permit will require one million euros of investment.
Income tax
In terms of corporate tax, the leaders in France and Italy are more than thirty-three percent. In Australia, twenty-five percent, in Slovakia, twenty-one percent, Great Britain and Croatia, twenty percent, Poland and the Czech Republic, nineteen. The lowest income taxes in Europe are in Slovenia (seventeen percent) and Hungary (sixteen percent).
It is income tax that shows how profitable it is to conduct business in a particular country.
Taxes in Germany
The German economy is considered to be the first economy in Europe, maybe, in part, this has led to the misconception that taxes are the highest in the European Union.
Federated Germany includes sixteen lands. Between the entities are distributed state obligations and functions in terms of ensuring income. In Germany, in addition to federal and municipal taxation, there is another level - joint. It includes VAT.
Separately - church tax.
There are forty-five types of taxes in Germany, but this does not mean that all citizens pay them. For example, dog breeders are required to remember the dog tax.
Nevertheless, some taxes that are paid mainly by entrepreneurs may seem inappropriate. These are mainly “medieval”. Of this category, the duty on the production of acetic acid, however, has recently been canceled. And the tax on coffee and tea has been safely preserved. Of those distant ages, there is also a “deluxe tax" that applies to champagne. It is included in the price of sparkling wines, the state makes a profit. In general, all alcohol in Germany is subject to excise taxes.
German Business Tax Campaign
More than ninety percent are limited liability companies. They, as well as joint stock companies and foreign corporations, are tax deductible. There are two types of tax for entrepreneurs:
- Solidarity corporate tax. It is calculated from profit and charged at a single national rate - fifteen percent in all lands. The solidarity allowance was introduced in 1995 to finance the connection of the Federal Republic of Germany and the German Democratic Republic. This is five and a half percent of the accrued corporate tax.
- Fishing. He is a municipal. The base rate of three percent is the same, and multipliers set by the municipalities are added to it. The general tax rate may not be less than seven percent in the aggregate, the upper limit is not limited.
For businesses and large corporations, the tax system is understandable, transparent and predictable. However, businessmen try to reduce the fee and usually achieve this with the help of a tax consultant.
Entrepreneurs believe that Germany has developed a fairly profitable tax system. On average, the total load at the level of 29.83%.
What taxes are paid in euros?
In euros, citizens of countries belonging to the European Union pay taxes. European currency pays all types of taxes in the EU.
Taxes in Europe and Russia
Globalization leads to the fact that tax processes will have to be regulated together. But countries are not ready for this. Coordination is a skepticism as the first step towards agreement.
Today, the tax burden is slowly but surely moving towards a decrease. This is noted by individual taxpayers and businessmen. Corporate fell from twenty-seven and a half percent to twenty-four. And this is for ten to fifteen years. It didn’t change too much, but still lost an indirect tax, almost minus one percent brought the rate to thirty percent. Total, if you add up all the positions, on average the tax burden on the world economy is 22%. The situation looks different if we consider individual countries. Only a state with a high standard of living can afford tax breaks.
Economists believe that if you raise the tax rate, it will provide a short-term increase in budget revenues. However, in Russia such a decision had a negative impact on the commercial sector. When insurance premiums were raised, entrepreneurs simply started closing their companies. Therefore, analysts insist: if tax collections are to increase, then only if a progressive tax system is applied.
For Russia, this theory in practice may appear differently: it is highly probable that a progressive scale will play a role in lowering budget revenues. Inequality of population incomes is great in Russia: almost 50% of incomes are held by 20% of Russians.And citizens are not too disciplined to comply with the law. In addition, Russia does not have the benefits that Europe offers using a progressive tax scale.
Typically, in Europe, the amount and size of taxes often do not change, and Europeans are not averse to fighting tax breaks and offshore.
Experts advocate that all countries agree to bring their tax laws to a common denominator for a maximum of 10 years. And it's not just about refusing double taxation.