oecd tax database brochure · in 2019, a top statutory pit rate of more than 30% applied in all but...

TAX DATABASEKEY TAX RATE INDICATORS

Update June 2020

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Colombia was not an OECD Member at the time of the last update of the Tax Database and is therefore not included in this publication. Accordingly, Colombia does not appear in the list of OECD Members and is not included in the zone aggregates.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

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© OECD 2020

TAX DATABASE - KEY INDICATORS

This summary presents comparativeinformation on a range of statutory taxrates and tax rate indicators in OECDcountries, encompassing personalincome tax rates and social securitycontributions, corporate income taxrates and value-added taxes.

These indicators provide a baseline ofinformation on tax settings in 2019 andin early 2020. Since then, manycountries have introduced a range ofshort-term tax measures in response toCOVID-19, which are detailed inhttps://www.oecd.org/tax/covid-19-tax-policy-and-other-measures.xlsm.

CONTENTS

Overview 3

Taxes on Labour 4

Personal Income Taxes 10

Corporate Income Taxes 14

Value Added Tax 18

Further Reading 20

OECD TAX DATABASE 2020 - 3

TAX RATES ON LABOUR, CORPORATE INCOME AND CONSUMPTION

TAXES ON LABOUR

The average tax wedge for all four family types variedsignificantly between 2000 and 2019. Since 2000, allfour family types experienced a continuous decrease in theirtax wedge, reaching a temporary low during the financialcrisis in 2009. In the three years following the crisis, the taxwedge rose again for all four family types. However, the taxwedge of all four family types is now lower than in 2000.

The tax wedge of the average worker isthe highest throughout the observedperiod, now stabilising at 36%, which isclose to but slightly below the level of2000.

A similar trend can be observed for the taxwedge of the two-earner marriedcouple and the tax wedge of the one-earner married couple, which are nowat 32.9% and 26.4% respectively.

The average tax wedge of the singleperson with two children earning 67%of the average wage is the lowest of allfour family types throughout the wholeperiod. After experiencing a short increasebetween 2009 and 2013, it has nowreached an all-time low of 15.8% of totallabour costs.

The average tax wedge measures the effective tax rateon labour costs as the difference between the labourcosts to the employer and the corresponding net take-home pay of the employee. It equals the sum of personalincome tax, employee and employer social securitycontributions (SSCs) plus any payroll taxes, minus anycash benefits received by the employee, expressed as apercentage of labour costs (gross wages plus employerSSCs and payroll taxes).

4 – OECD TAX DATABASE 2020

10

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25

30

35

40

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Single person at 100% of the average wage (AW), no childTwo-earner married couple, one at 100% of AW and the other at 67%, two childrenOne-earner married couple at 100% of AW, two childrenSingle person at 67% of AW, two children

OECD average tax wedge, 2000-2019as % of total labour costs


Source: OECD (2020). OECD Tax Database. oe.cd/tax-database.

TAXES ON LABOUR

Compared to 2000, the average OECD tax wedge in 2019 has decreased for alleight family types, on average by 2.2 percentage points. The largest decrease overthis period occurred for the single worker with two children earning 67% of theaverage wage (4.2 percentage points).

The OECD average tax wedge as a share of total labour costs differs significantlyacross family types. In 2019, it ranged from

15.8% for a single person with two children earning 67% of the average wage to

40.3% for a single person without children earning 167% of the average wage.


0

10

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30

40

Single personat 67% of AW,

no child

Single personat 100% of

AW, no child

Single personat 167% of

AW, no child

Single personat 67% of AW,two children

One-earnermarried

couple at100% of AW,two children

Two-earnermarried

couple, one at100% of AWand the otherat 67%, two

children

Two-earnermarried

couple, bothat 100% ofAW, twochildren

Two-earnermarried

couple, one at100% of AWand the other

at 67%, nochild

2019 2000

OECD average tax wedge, 2000 and 2019as % of total labour costs



TAXES ON LABOUR

Across OECD countries, the sum of income tax, employer social securitycontributions (SSCs) and employee SSCs as a share of labour costs for the averageworker ranged from 52.2% in Belgium to 7.0% in Chile, with an average of 36.0%.

of the countries havea tax wedge between30% and 45%.65%

The percentage of labour costs paid inincome tax varies considerably acrossOECD countries. The lowest figures arein Chile (0.05%) and Korea (6.0%) andthe highest values are in Denmark(35.6%), with Australia and Iceland bothover 20%.

The total of employee and employer SSCs as a percentage of labour costs exceeds 20%in more than half of the OECD countries. In five OECD countries, it represents at leastone-third of labour costs: Austria, the Czech Republic, France, Germany and the SlovakRepublic.


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BEL

DEU

ITA

AUT

FRA

HUN

CZE

SVN

SWE

LVA

FIN

SVK

PRT

GRC

ESP

TUR

LUX

NLD

EST

LTU

OECD NO

RPO

LDN

KIR

LIS

LJP

NGB

RCA

NUS

AAU

SKO

RIS

RCH

EME

XNZ

LCH

L

Income tax plus employee and employer social security contributions (SSC), 2019as % of total labour costs

Note: Single individual without children at the income level of the average worker. Includes payroll taxes where applicable.Source: OECD (2020). OECD Tax Database. oe.cd/tax-database.

The tax wedge of the average worker in OECD countries is

comprised primarily of employer SSCs (13.8% of labour

costs), followed by income tax (13.7%) and employee SSCs

(8.5%).


PERSONAL INCOME TAXES

In 2019, a top statutory PIT rate of more than30% applied in all but five OECD countries. Inthree of these countries – the Czech Republic(15%), Estonia (20%) and Hungary (15%) – asingle rate PIT applies to all levels of taxableincome.

Eleven OECD countries (Sweden, Japan,Denmark, France, Greece, Austria, Canada,Portugal, Belgium, the Netherlands and Finland,listed in descending order) apply a top PIT rate ofmore than 50%, with thresholds ranging from 1.1times the average wage in Belgium to 22.7 timesthe average wage in Austria.

The top statutory personalincome tax (PIT) rate is thecombined central governmentand sub-central governmentpersonal income tax rate thatapplies for gross wage earningsin the highest earnings bracket ofthe PIT rate schedule. Taxcredits and tax deductions arenot taken into account. Theearnings threshold is given by thebottom end of this bracket, i.e.the lowest income where the topPIT rate first applies, expressedas a multiple of the averagewage.


AUS

AUTBEL CAN

CHL

CZE

DNK

EST

FIN FRADEU

GRC

HUN

ISLIRL ISRITA

JPN

KOR

LVA

LTU

LUX

NLD

NZLNOR

POL

PRT

SVK

SVN

ESP

SWE

CHE

TUR

GBRUSA

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Top PIT rate (in %)

Threshold at which the top PIT rate applies (as a multiple of the average wage)

average

Top statutory PIT rates, 2019against their thresholds

Note: The figure includes data for all OECD countries except Mexico. Mexico, which is an outlier, has been excluded to improve the readability of the graph. In Mexico, a top PIT rate of 35% applies above a threshold of 26.6 times the average wage.Source: OECD (2020). OECD Tax Database. oe.cd/tax-database.

In these three countries, a single rate PITapplies to all levels of taxable income.


PERSONAL INCOME TAXES

In 2019, top PIT rates ranged from morethan 55% in Sweden, Japan, Denmark andFrance to 25% and below in the SlovakRepublic, Estonia, the Czech Republic andHungary.

Compared to 2000, top PIT rates havedecreased in the majority of OECDcountries, with the largest decrease inHungary, from 40% to 15%.

However, compared to 2007, 23 OECDcountries have increased their top PITrates, leading to an increase in the OECDaverage PIT rate between 2007 and 2019.

In 2019, the OECD average top PIT rate reached a level close to 43%, 2.6 percentage points lower than in 2000.


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SWE

JPN

DNK

FRA

AUT

GRC

CAN

PRT

BEL

NLD

FIN

ISR

SVN

IRL

DEU

ITA

AUS

ISL

KOR

LUX

GBR

USA

ESP

OECD CH

ENO

RTU

RCH

LME

XNZ

LPO

LLV

ALT

USV

KES

TCZ

EHU

N

2019 2000 2007

Top statutory PIT rates (in %), 2000, 2007 and 2019



CORPORATE INCOME TAXES

In 2020, combined statutory CIT rates in OECDcountries ranged from 9% in Hungary to over30% in Portugal and France.

Between 2000 and 2020, statutory CIT rates havedecreased in all but one OECD country, leading to adecrease in the OECD average statutory CIT rate of 9percentage points. Five OECD countries (NewZealand, the United States, Norway, Sweden and theUnited Kingdom) did not change their statutory CITrates between 2000 and 2007, but lowered them inthe years after the 2007 financial crisis.

Chile was the only country to have a higher CITrate in 2019 compared to 2000, with its CIT rateincreasing from 15% to 25%.

The combined statutorycorporate income tax (CIT)rate shows the combinedcentral and sub-central headlinetax rate faced by corporations.It is given by the centralgovernment rate (lessdeductions for sub-nationaltaxes) plus the sub-central rate.Where a progressive (asopposed to flat) rate structureapplies, the top marginal rate isshown.


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FRA

PRT

AUS

MEX

DEU

JPN

NZL

ITA

KOR

G20

CAN

USA

AUT

BEL

CHL

NLD

ESP

LUX

GRC

OECD IS

REU

-22

DNK

NOR

TUR

SWE

CHE

SVK

EST

FIN ISL

LVA

CZE

POL

SVN

GBR

LTU

IRL

HUN

2020 2000 2007

Note: The averages are unweighted averages. The EU-22 average includes all EU countries that are members of the OECD. The G20 average includes all G20 countries, excluding the EU.Source: OECD (2020). OECD Tax Database. oe.cd/tax-database.

Combined statutory CIT rates (in %), 2000, 2007 and 2020


CORPORATE INCOME TAXES

While the OECD average statutory CIT rate wasequal to the EU-22 average of 32.2% in 2000, itwas more than 1 percentage point higher thanthe EU-22 average in 2020, at 23.3% comparedto 22.2%.

The G20 average was the highest of the threestatutory CIT rate averages between 2000 and2020. The gap between the G20 average andthe OECD average statutory CIT rate hasremained relatively stable at around 3.5percentage points throughout the period.

The statutory CIT rate measuresthe marginal tax that would bepaid on an additional unit ofincome, in the absence of otherprovisions in the tax code.However, it does not reflect anyspecial regimes or rates targetedto certain industries or incometypes, nor does it take intoaccount the breadth of thecorporate tax base to which therate applies.

The OECD average, the EU-22 average and the average for the G20 countriesaverage combined statutory CIT rates decreased strongly between 2000 and2020, most visibly in the course of the financial crisis between 2007 and 2008.


23.3

32.2

22.2

34.7

26.9

20

25

30

35

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

OECD Average EU-22 Average G20 Average

Combined statutory CIT rates (in %), 2000-2020

Note: The averages are unweighted averages. The EU-22 average includes all EU countries that are members of the OECD. The G20 average includes all G20 countries, excluding the EU.Source: OECD (2020). OECD Tax Database. oe.cd/tax-database.


VALUE ADDED TAX

In 2019, standard VAT rates rangedfrom 27% in Hungary to less than10% in Japan, Switzerland andCanada.

Compared to 2005, the standard VATrate increased in two thirds of OECDcountries (24), leading to an increase inthe OECD average standard VAT rate.Since reaching its peak of 19.3% in2015, the OECD average standard VATrate has remained stable.

In 2019, the average standard VATrate of the 22 OECD countries thatare members of the EU was at21.8%, which is significantly higherthan the OECD average.

The Value Added Tax (VAT) (and itsequivalent in several jurisdictions, the Goodsand Services Tax, or GST) is a specific type ofturnover tax levied at each stage in theproduction and distribution process. Althoughthe liability for VAT falls on the suppliers ofgoods or services, the tax burden is designedto fall on final consumers, making the VAT atax on final consumption of goods orservices.

The standard VAT rate generally applies toall goods and services, unless adviseddifferently by legislation. However, mostOECD countries continue to apply a widevariety of reduced rates and exemptions tosupport various policy objectives (see: OECDConsumption Tax Trends, 2018).


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HUN

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FIN

GRC ISL

IRL

POL

PRT

ITA

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EU-2

2BE

LCZ

ELV

ALT

UNL

DES

PAU

TES

TFR

ASV

KGB

ROE

CD CHL

DEU

TUR

ISR

LUX

MEX

NZL

AUS

KOR

JPN

CHE

CAN

2019 2005

Standard VAT rates (in %), 2005 and 2019

Note: The averages are unweighted averages including the countries for which data was available by the time this graph was composed. The OECD average includes all OECD countries but the United States(which do not apply a VAT). The EU-22 average includes all OECD countries that are members of the EU. Country-specific notes can be found here: https://www.oecd.org/tax/consumption-tax-trends-19990979.htmSource: National delegates, position as of 1 January of the respective year.


https://www.oecd.org/tax/consumption-tax-trends-19990979.htm

OECD (2020), Taxing Wages 2020, OECD Publishing, Paris, oe.cd/TaxingWages.

OECD (2019), Corporate Tax Statistics, OECD Publishing, Paris, oe.cd/corporate-tax-stats.

OECD (2018), Consumption Tax Trends 2018: VAT/GST and Excise Rates, Trends and Policy Issues, OECD Publishing, Paris, oe.cd/consumption-tax-2018.

Key links: Access the data: stats.oecd.org/Index.aspx?DataSetCode=TABLE_I1 Tax Database webpage: oe.cd/tax-database

FURTHER READING

oecd tax database brochure · in 2019, a top statutory pit rate of more than 30% applied in all but...

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