Labor tax and contributions (% of commercial profits) - Country Ranking - Europe

Definition: Labor tax and contributions is the amount of taxes and mandatory contributions on labor paid by the business.

Source: World Bank, Doing Business project (http://www.doingbusiness.org/).

See also: Thematic map, Time series comparison

Find indicator:
Rank Country Value Year
1 France 50.00 2019
2 Belgium 44.50 2019
3 Italy 42.90 2019
4 Slovak Republic 39.70 2019
5 Belarus 39.00 2019
6 Czech Republic 38.40 2019
7 Estonia 38.00 2019
8 Spain 35.80 2019
9 Sweden 35.40 2019
10 Lithuania 35.20 2019
11 Ukraine 33.80 2019
12 Austria 33.70 2019
13 San Marino 30.90 2019
14 Moldova 29.90 2019
15 Greece 28.30 2019
16 Latvia 27.20 2019
17 Portugal 26.80 2019
18 Hungary 26.40 2019
19 Poland 25.30 2019
20 Finland 23.00 2019
21 Bulgaria 21.50 2019
21 Germany 21.50 2019
23 Iceland 20.60 2019
24 Netherlands 20.50 2019
25 Serbia 20.20 2019
26 Turkey 19.70 2019
27 Croatia 19.40 2019
28 Albania 18.80 2019
29 Slovenia 18.20 2019
30 Switzerland 17.70 2019
31 Norway 15.90 2019
32 Luxembourg 15.40 2019
33 Bosnia and Herzegovina 13.60 2019
34 Montenegro 13.40 2019
35 Cyprus 13.00 2019
36 Ireland 12.40 2019
37 United Kingdom 12.00 2019
38 Malta 11.10 2019
39 Denmark 4.00 2019
40 Romania 3.40 2019
41 North Macedonia 0.00 2019
42 Liechtenstein -2.00 2019

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Development Relevance: The total tax rate payable by businesses provides a comprehensive measure of the cost of all the taxes a business bears. It differs from the statutory tax rate, which is the factor applied to the tax base. In computing business tax rates, actual tax payable is divided by commercial profit. Taxes are the main source of revenue for most governments. The sources of tax revenue and their relative contributions are determined by government policy choices about where and how to impose taxes and by changes in the structure of the economy. Tax policy may reflect concerns about distributional effects, economic efficiency (including corrections for externalities), and the practical problems of administering a tax system. There is no ideal level of taxation. But taxes influence incentives and thus the behavior of economic actors and the economy's competitiveness.

Limitations and Exceptions: To make the data comparable across countries, several assumptions are made about businesses. The main assumptions are that they are limited liability companies, they operate in the country's most populous city, they are domestically owned, they perform general industrial or commercial activities, and they have certain levels of start-up capital, employees, and turnover. The Doing Business methodology on business taxes is consistent with the Total Tax Contribution framework developed by PricewaterhouseCoopers (now PwC), which measures the taxes that are borne by companies and that affect their income statements. However, PwC bases its calculation on data from the largest companies in the economy, while Doing Business focuses on a standardized medium-size company.

Statistical Concept and Methodology: The data covering taxes payable by businesses, measure all taxes and contributions that are government mandated (at any level - federal, state, or local), apply to standardized businesses, and have an impact in their income statements. The taxes covered go beyond the definition of a tax for government national accounts (compulsory, unrequited payments to general government) and also measure any imposts that affect business accounts. The main differences are in labor contributions and value added taxes. The data account for government-mandated contributions paid by the employer to a requited private pension fund or workers insurance fund but exclude value added taxes because they do not affect the accounting profits of the business - that is, they are not reflected in the income statement.

Aggregation method: Unweighted average

Periodicity: Annual

General Comments: Data are presented for the survey year instead of publication year.