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Austria’s taxes among highest in EU

A new survey by Eurostat, the statistical office of the European Union, shows that Austrians pay one of the highest rates of labour taxation in the EU - at 57.4%, third only to Sweden (58.6%) and the Netherlands (57.5%).

Austria's taxes among highest in EU
Euro notes. Photo: APA

The survey, released by the EU on Monday, shows that out of the 28 countries in the EU area, Austria is among the top three in terms of taxes paid on labour, which is considered to be a major obstacle to economic growth.  Germany is in fourth position behind Austria, with 56.6% for labour taxes.

The greatest source of tax revenue among the 28 states is labour taxes, which constitute just over half of the total tax receipts in 2012 at 51.0%.  This is followed by consumption taxes (28.5%) and taxes on capital (20.8%). 

The four countries with the lowest labour taxes are Bulgaria, Malta, Cyprus and the U.K., all of which have labour tax rates of less than 40%.

Austria's taxes on consumption and capital remain relatively low in the EU, with rates of 27.6% and 15.2% respectively in 2012.

Labour taxes are relatively increasing since the past 10 years, while consumption and capital taxes have been reducing in Austria.

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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