OECD TAX DATABASE
EXPLANATORY ANNEX
(Document updated May 2013)
1
Table of contents
PART I. TAXATION OF WAGE INCOME
6
AUSTRALIA
AUSTRIA
ITALY
MEXICO
6
6
7
7
Part I, Table 1
8
I.1. AUSTRIA
I.1. BELGIUM
I.1. CHILE
I.1. FINLAND
I.1. GERMANY
I.1. ITALY
I.1. LUXEMBOURG
I.1. MEXICO
I.1. NETHERLANDS
I.1. NORWAY
I.1. POLAND
I.1. SLOVAK REPUBLIC
I.1. SLOVENIA
I.1. SPAIN
I.1. SWITZERLAND
I.1. UNITED KINGDOM
I.1. UNITED STATES
8
8
9
10
11
14
16
17
19
19
19
20
21
22
23
23
24
Part I, Table 2
24
I.2. BELGIUM
I.2. CANADA
I.2. DENMARK
I.2. FINLAND
I.2. ICELAND
I.2. ITALY
I.2. KOREA
I.2. NORWAY
I.2. PORTUGAL
I.2. SPAIN
I.2. SWEDEN
I.2. SWITZERLAND
I.2. UNITED STATES
24
25
30
30
30
31
33
33
33
33
34
34
34
Part I, Table 3
36
I.3. CANADA
I.3. SPAIN
I.3. SWITZERLAND
36
36
36
PART II. TAXATION OF CORPORATE AND CAPITAL INCOME
37
Part II, Table 1
37
2
II.1. BELGIUM
II.1. CANADA
II.1. CHILE
II.1. FRANCE
II.1. GERMANY
II.1. GREECE
II.1. HUNGARY
II.1. ISRAEL
II.1. ITALY
II.1. LUXEMBOURG
II.1. MEXICO
II.1. NETHERLANDS
II.1. NORWAY
II.1. POLAND
II.1. SWITZERLAND
II.1. UNITED STATES
37
38
38
38
39
39
42
42
43
48
49
49
49
50
50
50
Part II, Table 2
51
II.2. AUSTRALIA
II.2. BELGIUM
II.2. CANADA
II.2. CHILE
II.2. CZECH REPUBLIC
II.2. HUNGARY
II.2. ISRAEL
II.2. ITALY
II.2. MEXICO
II.2. NETHERLANDS
II.2. NORWAY
II.2. PORTUGAL
II.2. SLOVAK REPUBLIC
II.2. SPAIN
II.2. UNITED KINGDOM
II.2. UNITED STATES
51
51
54
54
55
55
55
56
56
57
57
57
58
58
59
60
Part II, Table 3
61
II.3. CANADA
II.3. GERMANY
II.3. LUXEMBOURG
II.3. KOREA
II.3. NORWAY
II.3. PORTUGAL
II.3. SWITZERLAND
II.3. UNITED STATES
61
62
62
62
62
62
63
63
Part II, Table 4
64
II.4. AUSTRIA
II.4. BELGIUM
II.4. CANADA
II.4. CHILE
II.4. FINLAND
64
64
65
65
65
3
II.4 FRANCE
II.4. GERMANY
II.4. GREECE
II.4. HUNGARY
II.4. IRELAND
II.4. ISRAEL
II.4. ITALY
II.4. KOREA
II.4. MEXICO
II.4. NETHERLANDS
II.4. NORWAY
II.4. PORTUGAL
II.4. SLOVENIA
II.4. SWITZERLAND
II.4. UNITED STATES
66
66
67
68
69
69
70
71
71
71
71
72
72
72
72
PART III. SOCIAL SECURITY CONTRIBUTION TABLES
72
Part III, Table 1
72
III.1. AUSTRIA
III.1. BELGIUM
III.1. CANADA
III.1. CHILE
III.1. CZECH REPUBLIC
III.1. GERMANY
III.1. GREECE
III.1. ISRAEL
III.1. LUXEMBOURG
III.1. MEXICO
III.1 NETHERLANDS
III.1. POLAND
III.1. SLOVAK REPUBLIC
III.1. SLOVENIA
III.1. SPAIN
III.1. SWEDEN
III.1. UNITED KINGDOM
72
73
77
78
79
79
79
80
82
82
82
84
85
87
88
90
90
Part III, Table 2
92
III.2. AUSTRIA
III.2. BELGIUM
III.2. CANADA
III.2. CHILE
III.2. CZECH REPUBLIC
III.2. GREECE
III.2. IRELAND
III.2. ISRAEL
III.2. LUXEMBOURG
III.2. MEXICO
III.2. NETHERLANDS
III.2. NORWAY
III.2. POLAND
92
92
94
95
95
96
96
96
97
97
97
100
100
4
III.2. SLOVAK REPUBLIC
III.2. SPAIN
III.2. SWEDEN
III.2. UNITED KINGDOM
III.2 UNITED STATES
100
102
102
102
103
Part III, Table 3
103
III.3. AUSTRIA
III.3. BELGIUM
III.3. CANADA
III.3. CHILE
III.3. CZECH REPUBLIC
III.3. GERMANY
III.3. GREECE
III.3. IRELAND
III.3. ISRAEL
III.3. ITALY
III.3. KOREA
III.3. MEXICO
III.3. NDS
III.3. NORWAY
III.3. POLAND
III.3. PORTUGAL
III.3. SLOVAK REPUBLIC
III.3. SLOVENIA
III.3. SPAIN
III.3. SWEDEN
III.3. TURKEY
III.3. UNITED KINGDOM
103
103
104
104
105
105
105
107
107
108
109
109
111
111
111
112
112
113
115
116
116
117
5
PART I. TAXATION OF WAGE INCOME
Note to Part I, Tables 4 to 7
Part I Tables I.4-I.7 are based on a methodology elaborated in the annual OECD publication ‘Taxing
Wages’, examining taxes paid on wage income in OECD countries. Tables I.4-I.5 generate marginal and
average tax rates on wage income for single individuals, while Table I.6 considers a broader range of
household cases, and Table I.7 sets out the top marginal personal tax rates where the highest statutory tax
rate first applies. The ‘Taxing Wages’ framework analyses personal income tax, social security
contributions paid by employees and their employers, and cash benefits received by families with children,
and how these taxes and benefits impact on net household incomes. The ‘Taxing Wages’ publication
considers eight household cases, analysing marginal and average tax rates on wage incomes of single
individuals, one-earner and two-earner married couples, with and without children. It is assumed that their
annual income from employment is equal to a given fraction of the average gross wage earnings of adult,
full-time workers in the manufacturing sector of each OECD economy. Any income tax that might be due
on non-wage income, as well as, all other kinds of taxes – e.g., corporate income tax, net wealth tax and
consumption tax – are not taken into account.
Personal average tax rate (or “tax burden”) is the term used when personal income tax and
employees’social security contribution are expressed as a percentage of gross wage earnings.
Tax wedges – between labour costs to the employer and the corresponding net take-home pay of the
employee – are calculated by expressing the sum of personal income tax, employee plus employer social
security contributions together with any payroll tax, as a percentage of labour costs. To determine labour
costs, employer social security contributions and – in some countries – payroll taxes must be added to
gross wage earnings of employees.
The gross wage earnings used are either provided by the country or they are estimates derived by the
Secretariat using the latest available country estimate and projecting this amount using the annual
percentage change in wages reported in the most recently published edition of the OECD Economic
Outlook.
It should be noted that the figures provided in Tables I.4 to I.7 may be different from those published
in the publication Taxing Wages. These differences will arise where updated information becomes
available such as new APW figures or where there have been methodological changes. The user is
encouraged to consult the Taxing Wages publication for more information.
AUSTRALIA
In the 1999-00 financial year the Medicare levy was classified as an employee SSC. From 2000-01
the Medicare levy was classified as an element of the central government tax rate.
AUSTRIA
In Tables 4 and 5, the total tax wedges include payroll taxes of 7.5 per cent of gross wage.
6
ITALY
The most representative city is Rome, located in the region Lazio. Therefore the combined top
marginal rate includes:
a) the regional surcharge tax levied in Lazio at a rate of 1.73%.
b) the local surcharge tax levied in Rome at a rate of 0.9%.
See the explanatory notes to table 1.6 for further details on regional and local surcharge taxes.
MEXICO
As reported on ‘Taxing Wages’, social security contributions do not include those made by employers
and employees to privately managed retirement funds (AFORES), or to the INFONAVIT housing fund.
In Mexico there is no special tax treatment to married individuals or families with children, therefore,
the rates reported in Table I.6 are the same in all cases.
7
Part I, Table 1
I.1. AUSTRIA
In 2009, there was a change to a new tax schedule: Incomes up to 11 000€ are tax-free (zero-zone),
the general tax credit was abolished. The formulas to calculate the tax are presented in the tax law. The
rates shown in table I.1 are the marginal tax rates. The marginal tax rate (top rate) for incomes above
60 000€ has remained unchanged at 50%.
I.1. BELGIUM
Standard tax allowance
A standard tax allowance is applicable starting from the first income bracket. Since 2004 the standard
tax allowance of married persons and singles are equal. From 2008 onwards, earners of relatively low
aggregated taxable income (ATI, see table) benefit from an increased standard tax allowance.
ATI ≤ 22 870
6 400
2009 and 2010
Income (euros)
Allowance
(euros)
ATI ≤ 23 900
6 690
Between 22 870
and 23 100
6 400 –
(ATI – 22 870)
Between 23 900
and 24 160
6 690 –
(ATI – 23 900)
23 100 ≤ ATI
6 150
24 160 ≤ ATI
6 430
Income (euros)
2008
Allowance (euros)
2012
Income (euros)
ATI ≤ 25 270
Between 25 270
and 25 540
25 540 ≤ ATI
In euros
Singles
Married persons
In BEF
Singles
Married
persons
1989
2013
Allowance (euros)
7 070
7 070 –
(ATI – 25 270)
6 800
2000
5 205.76
(210 000
BEF)
4 139.82
(167 000
BEF)
1990
2011
Income
Allowance
(euros)
(euros)
ATI ≤ 24 6 830
410
Between
6 830 –
24 410
(ATI – 24
and
24 410)
670
24 670 ≤ 6 570
ATI
Income (euros)
ATI ≤ 25 990
Between 25 990
and 26 270
26 270 ≤ ATI
2001
5 350
(215 818
BEF)
4 240
(171 041
BEF)
1991
1992
Allowance (euros)
7 270
7 270 –
(ATI – 25 990)
6 990
2002
2003
2004
2005
2006
2007
5 480
5 570
5 660
5 780
5 940
6040
4 350
4 610
5 660
5 780
5 940
6040
1993
1994
165 000
170 000
176 000
181 000
186 000
191 000
130 000
134 000
139 000
143 000
146 000
150 000
1995
1996
1997
1998
1999
196
000
154
000
198
000
156
000
203
000
160
000
206
000
162
000
208
000
165
000
Crisis surcharge
From 1993 onwards a 3% crisis surcharge was levied on personal income tax (Contribution
complémentaire de crise, C.C.C.). The surcharge was gradually repealed between 2000 and 2002, when the
rate became function of the aggregated taxable income (ATI) of the household. The surcharge on PIT has
8
been abolished from 2003 on..
Belgian Surtax in 2002:
ATI bracket in euros.
29 747.24 or less
Between 29 747.25 and 30 986.70
30 986.70 and over
Surtax rate
0%
1 % (ATI – 29 747.24) /1 239.46
1%
1 Euro = 40.3399 BEF
In 2000 and 2001:
ATI bracket in BEF
800 000 or less
Between 800 000
and 850 000
Between 850 000 and 1 200 000
Between 1 200 000
and 1 250 000
1 250 000 and over
Surtax rate 2000
1%
1% +
1% (ATI – 800 000)/50 000
2%
2% +
1% (ATI – 1 200 000)/50 000
3%
Surtax rate 2001
0%
1 % (ATI - 800 000) /50 000
1%
1%+
1 % (ATI – 1 200 000)/50 000
2%
I.1. CHILE
Salaries, pensions (except those from a foreign source) and other remunerations are taxed on a
monthly basis via the Second Category Unique Income Tax. The tax base is gross salary and work
compensations less social security payments. The thresholds are expressed in the Monthly Tax Unit
(Unidad Tributaria Mensual - UTM), which is an accounting unit for tax purposes that is adjusted monthly
according to the change in the Consumer Price Index in the previous month. The UTM values in Chilean
pesos in December of each year were:
Year
UTM
2000
27,600
2001
28,524
2002
29,389
2003
29,739
2004
2005
30,308
2006
32,206
2007
34,222
2008
37,652
2009
36,863
2010
37,605
2011
39,021
2012
40,206
31,571
Personal income, from all sources, is then taxed annually via the Global Complementary Tax. The
thresholds for this tax are expressed in the Annual Tax Unit (Unidad Tributaria Anual -UTA), which is
equal to the December UTM, multiplied by twelve. The UTA values in Chilean pesos in December of each
year were:
9
Year
UTA
2000
331,200
2001
342,288
2002
352,668
2003
356,868
2004
2005
363,696
2006
386,472
2007
410,664
2008
451.824
2009
442,356
451,260
2010
378,852
2011
468,252
2012
482,472
Both the above taxes have identical tax brackets and threshold figures, but are expressed in different
unities as explained above.
Tax thresholds in the table rates are calculated by applying the following multiples to the UTM, in
case of the Second Category Unique Income Tax, or to the December UTA, if it corresponds to the Global
Complementary Tax:
Taxable income
(UTA – UTM)
0 – 13.5
Tax rates
exempt
13.5 – 30
30 – 50
4%
8%
50 – 70
13.5%
70 – 90
23%
90 – 120
30.4%
120 – 150
35.5%
150 and over
40%
: New tax rates levied as of 2013.
Individuals and legal entities that are not resident or domiciled in Chile are generally taxed on any
income derived from Chilean sources via the Additional Tax, at a standard tax rate of 35% (lower rates
applies for some types of income).
I.1. FINLAND
A standard deduction for work-related expenses equal to the amount of wage or salary, with a
maximum amount of EUR 620 is granted.
10
An earned income tax credit is granted against the central government income tax. If the credit
exceeds the amount of central government income tax, the excess credit is deductible from the municipal
income tax and the health insurance contribution for medical care. The credit is calculated on the basis of
taxpayers’ income from work. The credit amounts to 7.3 per cent of income exceeding EUR 2 500, until it
reaches its maximum of EUR 970. The amount of the credit is reduced by 1.1 per cent of the earned
income minus work related expenses exceeding EUR 33 000. The credit is fully phased out when
taxpayers’ income is about EUR 120 000.
I.1. GERMANY
The German personal income tax schedule is formula-based. Since 2004 the calculations are based on
a down to the next (full) EUR rounded amount of taxable income.
X is the taxable income.
T is income tax liability.
Definitions and formulas as of 2014 (amounts in EUR):
Y = (X – 8 354) / 10 000
Z = (X – 13 469) / 10 000
1.
T = 0 for X  8 354
2.
T = (974.58 Y + 1 400) Y for 8 355 
3.
T = (228.74 Z + 2 397) Z + 971 for 13 470 
4.
T = 0.42 X – 8 239 for 52 882  X  250 730
5.
T = 0.45 X – 15 761 for 250 731  X
 13 469
X
52 881
Definitions and formulas since 2013 (amounts in EUR):
Y = (X – 8 130) / 10 000
Z = (X – 13 469) / 10 000
1)
T = 0 for X  8 130
2)
T = (933.70 Y + 1 400) Y for 8 131 
 13 469
3)
T = (228.74 Z + 2 397) Z + 1 014 for 13 470 
4)
T = 0.42 X – 8 196 for 52 882  X  250 730
5)
T = 0.45 X – 15 718 for 250 731  X
X
52 881
Definitions and formulas from 2010 until 2012 (amounts in EUR):
Y = (X – 8 004) / 10 000
Z = (X – 13 469) / 10 000
11
 T = 0 for X  8 004
 T = (912.17 Y + 1 400) Y for 8 005 
 13 469
 T = (228.74 Z + 2 397) Z + 1 038 for 13 470  X  52 881
 T = 0.42 X – 8 172 for 52 882  X  250 730
 T = 0.45 X – 15 694 for 250 731  X
Definitions and formulas in 2009 (amounts in EUR):
Y = (X – 7 834) / 10 000
Z = (X – 13 139) / 10 000
 T = 0 for X  7 834
 T = (939.68 Y + 1 400) Y for 7 835 
 13 139
 T = (228.74 Z + 2 397) Z + 1 007 for 13 140 

 T = 0.42 X – 8 064 for 52 552  X  250 400
 T = 0.45 X – 15 576 for 250 401  X
Definitions and formulas in 2007 and 2008 (amounts in EUR):
Y = (X – 7 664) / 10 000
Z = (X – 12 739) / 10 000
 T = 0 for X  7 664
 T = (883.74 Y + 1 500) Y for 7 665 
X  12 739
 T = (228.74 Z + 2 397) Z + 989 for 12 740  X  52 151
 T = 0.42 X - 7 914 for 52 152  X  250 000
 T = 0.45 X – 15424 for 250 001  X
Definitions and formulas in 2005 and 2006 (amounts in EUR):
Y = (X – 7 664) / 10 000
Z = (X – 12 739) / 10 000
 T = 0 for X  7 664
12
 T = (883.74 Y + 1 500)Y for 7 665 
 12 739
 T = (228.74 Z + 2 397) Z + 989 for 12 740 
 52 151
 T = 0.42 X – 7 914 for 52 152  X
Definitions and formulas in 2004 (amounts in EUR):
Y = (X – 7 664) / 10 000
Z = (X – 12 739) / 10 000
1.
2.
3.
4.
T = 0 for X  7 664
T = (793.10 Y + 1 600) Y for 7 665 
 12 739
T = (265.78 Z + 2 405) Z + 1 016 for 12 740 
 52 151
T = 0.45 X – 8 845 for 55 152  X
Up to 2003 the calculations were based on a rounded amount of taxable income. If the taxable income
could not be divided by 36, it was rounded down to the next (full Euro) amount which could be divided by
36. Subsequently it was increased by EUR 18.
Definitions and formulas in 2002 and 2003 (amounts in EUR):
Y = (X – 7 200) / 10 000
Z = (X – 9 216) / 10 000
1.
2.
3.
4.
T = 0 for X  7 235
T = (768.85Y + 1 990)Y for 7 236  X  9 251
T = (278.65Z + 2 300)Z + 432 for 9252 
 55 007
T = 0.485X – 9 872 for 55 008  X
Definitions and formulas in 2001 (amounts in DM):
Y = (X - 14 040) / 10 000
Z = (X – 18 036) / 10 000
1.
2.
3.
4.
T = 0 for X  14 093
T = (387.89Y + 1 990) Y for 14 094  X 
T = (142.49Z + 2 300) Z + 857 for 18 090  X  107 567
T = 0.485X – 19 299 for 107 568  X
Definitions and formulas in 2000 (amounts in DM):
Y = (X – 13 446) / 10 000
Z = (X – 17 442) / 10 000
1.
2.
3.
4.
T = 0 for X  13 499
T = (262.76Y + 2 290) Y for 13 500  X  17 495
T = (133.74Z + 2 500) Z + 957 for 17 496  X 
T = 0.51X – 20 575 for 114 696  X
13
These formulae are used directly to calculate the income tax of single individuals. The income tax
liability for spouses who are assessed jointly is computed as follows: the formula income tax is calculated
with respect to one-half of the joint taxable income. The resulting amount is doubled to arrive at the
income tax liability of the spouses (splitting method).
I.1. ITALY
In 2003, the Financial Law introduced an allowance system for employees, self-employed and
pensioners, varying with income.
For employees the standard allowance for wage income (“no tax area”) was € 7 500.
The actual allowance granted to each individual depended on the value of a ratio that was defined as a
function of net income:
(26000 + 7500 – net income) / 26000
calculated as follows:
ratio > or = 1
0 < ratio < 1
ratio < or = 0
Actual allowance = Standard allowance
Actual allowance = 7 500.00 * ratio
Actual allowance = 0
Only for the years 2003 and 2004 tax credits were still applied for employed workers, varying with
income as follows:
INCOME
TAX CREDIT
From € 27 000.00 to € 29 500.00
€ 130.00
From € 29 500.01 to € 36 500.00
From € 36 500.01 to € 41 500.00
€ 235.00
€ 180.00
From € 41 500.01 to € 46 700.00
€ 130.00
From € 46 700.01 to € 52 000.00
€ 25.00
In 2005 the Financial Law introduced:
 new tax rates and income brackets;
 conversion of tax credits for family dependents into tax allowances
 abolition of tax credits for employees, self-employed and pensioners.
The personal allowances for family dependents (family area”) were calculated as follows:
maximum tax allowances for family dependents:
Spouse
Child
child under three years of age
first child (single parent)
disabled child
other dependent relatives
3,200 €
2,900 €
3,450 €
3,200 €
3,700 €
2,900 €
The actual allowance granted to each individual depended on the value of a ratio that was defined as a
function of net income:
14
(78000 + maximum family allowance – net income) / 78000
and was calculated as follows:
ratio > or = 1
0 < ratio < 1
ratio < or = 0
Actual allowance = maximum family allowance
Actual allowance = maximum family allowance * ratio
Actual allowance = 0
Tax allowances for children could be distributed between parents to allow them to take full advantage
of these allowances.
In 2007 a new tax credits system has replaced the former system of tax allowances :
PAYE tax credits
Amount
Up to 8,000
1,840
From 8,001 to 55,000
1,840 decreasing up to 0 on the basis of a ratio
defined as a function of net income
More than 55,000
0
Tax credits for pensions
Up to 7,500
Amount
1,725
1,725 decreasing up to 0 on the basis of a ratio
defined as a function of net income
0
From 7,501 to 55,000
More than 55,000
For pensioners who are 75 years old or more the tax credits described above are slightly higher.
Tax credits for self-employed
Up to 4,800
From 4,801 to 55,000
More than 55,000
Amount
1,104
1,104 decreasing up to 0 on the basis of a ratio
defined as a function of net income
0
For employees the formula to calculate the tax credit is:
Taxable income (EUR)
Up to 8,000
From 8,001 to 15,000
From 15,001 to 55,000
More than 55,000
PAYE tax credit (EUR)
1,840
Maximum tax credit + 502*(15,000 – taxable income)/7,000
Maximum tax credit*(55,000 – taxable income)/40,000
0
The maximum tax credit mentioned in the table above depends on the level of taxable income:
Level of taxable income (EUR)
From 8 001 to 15 000
From 15 001 to 23 000
From 23 001 to 24 000
From 24 001 to 25 000
From 25 001 to 26 000
From 26 001 to 27 700
From 27 701 to 28 000
From 28 001 to 55 000
Maximum tax credit (EUR)
1 338
1 338
1 348
1 358
1 368
1 378
1 363
1 338
15
Tax credits for family dependants have replaced the former tax allowances as follows:
Family tax credits
Amount
Spouse
800 decreasing up to 0 for net income over 80.000
Children
Under three years of age (*)
Over three years of age (*)
1,220 decreasing up to 0 for net income over 95,000
950 decreasing up to 0 for net income over 95,000
Other dependent relatives
750 decreasing up to 0 for net income over 80.000
(*) For families with disabled children the amount of
tax credits is 400 euros higher for each child
(*) For families with more than 3 children the amount
of tax credits is 200 euro higher for each child.
Families with more than 3 children that benefit from
tax credits for family dependants are also entitled to
an addition tax credit of euros 1,200
The spouse tax credit is calculated as a function of net income:
Level of taxable income (EUR)
Up to 15 000
From 15 001 to 29 000
From 29 001 to 29 200
From 29 201 to 34 700
From 34 701 to 35 000
From 35 001 to 35 100
From 35 101 to 35 200
From 35 201 to 40 000
From 40 001 to 80 000
More than 80 000
Amount of tax credit (EUR)
800 – 110*taxable income/15 000
690
700
710
720
710
700
690
690*(80 000 – taxable income)/40 000
0
The child tax credit is calculated as a function of net income:

for families with only one child: 950*(95 000 – taxable income)/95 000;

for families with more than one child the amount of 95 000 is increased by 15 000 for each child
other than the first, for every children
A lone parent receives an actual tax credit for the first child equal to the maximum between the
spouse tax credit and the child tax credit.
Tax credits for children have to be equally shared between the parents; however, parents can decide to
assign the entire amount of the tax credit to the spouse earning the higher income.
I.1. LUXEMBOURG
The following tables show the thresholds and marginal rates plus the top rate from 2001 to 2013:
16
2001
marginal
threshold
rate
9 668
11 378
13 089
14 799
16 510
18 220
19 931
21 641
23 352
25 062
26 773
28 483
30 193
31 904
33 614
14%
16%
18%
20'%
22%
24%
26%
28%
30%
32%
34%
36%
38%
40%
42%
2009 - 2010
Threshold
11265
13173
15081
16989
18897
20805
22713
24621
26529
28437
30345
32253
34161
36069
37977
39885
Marginal
rate
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
2002-2007
2008
threshold
marginal rate
threshold
marginal rate
9750
11400
13050
14700
16350
18000
19650
21300
22950
24600
26250
27900
29550
31200
32850
34500
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
10335
12084
13833
15582
17331
19080
20829
22578
24327
26076
27825
29574
31323
33072
34821
36570
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
Since 2011
Since 2013
Threshold
Marginal rate
Threshold
Marginal rate
11265
13173
15081
16989
18897
20805
22713
24621
26529
28437
30345
32253
34161
36069
37977
39885
41793
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
39%
11265
13173
15081
16989
18897
20805
22713
24621
26529
28437
30345
32253
34161
36069
37977
39885
41793
100000
8%
10
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
39%
40%
I.1. MEXICO
The figure reported under the heading “Personal allowance / tax credit” includes the maximum
personal allowance and the maximum tax credit as defined in ‘Taxing Wages’. The maximum personal
17
allowance was calculated by adding the maximum amount deductible of the end-of year-bonus (30 days of
the minimum legal wage) and the holiday bonus (15 days of the minimum legal wage).
In the column “personal allowance/ tax credit” the information for Mexico includes both a personal
allowance and a tax credit. The following table presents the composition of the aggregated number
reported on Table I.1 for the period 1981 to 2013.
Year
Employment
subsidy 1/ 2/
Holiday and end of year
bonuses
Personal allowance / Tax
credit
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
66,813.25
89,362.95
145,302.85
218,510.90
342,665.65
538,192.50
1,007,702.95
2,569,851.85
285,928.59
333,569.49
393,710.17
441,066.73
476.69
902.94
1,274.64
2,001.69
2,566.62
2,984.76
3,584.34
3,966.21
4,228.14
4,276.20
4,324.20
4,324.20
4,884.24
4,884.24
4,884.24
5,491.50
7,344.90
11,942.70
17,959.80
28,164.30
44,235.00
82,824.90
316,831.05
352,514.70
411,250.05
485,396.10
543,780.90
587.70
628.65
672.75
829.35
1,093.50
1,259.55
1,435.95
1,580.40
1,690.65
1,788.30
1,868.85
1,948.05
2,035.80
2,117.25
2,199.60
72,304.75
96,707.85
157,245.55
236,470.70
370,829.95
582,427.50
1,090,527.85
2,886,682.90
638,443.29
744,819.54
879,106.27
984,847.63
1,064.39
1,531.59
1,947.39
2,831.04
3,660.12
4,244.31
5,020.29
5,546.61
5,918.79
6,064.50
6,193.05
6,272.25
6,920.04
7,001.49
7,083.84
2008
4,884.24
2,287.80
7,172.04
2009
4,884.24
2,393.55
7,277.79
2010
4,884.24
2,509.65
7,393.89
2011
4,884.24
2,612.70
7,496.94
2012
4,884.24
2,722.50
7,606.74
4,884.24
2,840.40
7,724.64
2013
1/ Starting in 1993 the value of the Mexican peso changed, being one peso of 1993 equal to one thousand pesos of 1992.
2/ In the 2008 Tax Reform the salary tax credit changed its name to the employment subsidy; however, the benefit for workers remained the same.
18
I.1. NETHERLANDS
The tax brackets to
and
rates
for
employees under
the retirement age
are:Income from
labour
and
dwellings from
tax rate
employees
SSC combined rate
rate
(general
scheme)
0
19,645
5.85%
31.15%
37.0%
19,645
33,555
10.85%
31.15%
42.0%
33,555
55,991
42%
-
42%
52%
-
52%
55,991
For employees, most of the personal income tax and employees SSC’s is withheld by the employer
through the wage tax. Withheld wage tax is generally creditable to the personal income tax.
In 2013, a once-only surtax in the wage tax aforementioned of 16% of wages exceeding € 150,000 is
effective. This surtax has to be paid by the employer.
I.1. NORWAY
Personal income (i.e. ordinary income) is taxed with a 28 per cent flat rate in most of the country.
Ordinary income includes all income (e.g. from labour, capital and pensions) less allowances.
The revenue from the personal income tax on ordinary income is split between three levels of
government: central, state and local. The split is decided upon by the Parliament as part of the National
Budget. The central government tax rate between the personal allowance and the first threshold level is,
therefore, the central government revenue share of tax on ordinary income.
For municipalities in the northernmost parts of Norway, a reduced flat rate of 24.5 per cent applies.
The reduction is in the central government part of the income tax revenue.
The personal income tax rate on ordinary income is the same as the corporate tax rate. Any change in
the rate will thus apply for both corporate and personal income tax.
I.1. POLAND
Personal income tax was introduced in year 1992. Personal income tax is levied on all kinds of
income divided into individual sources. The income from a given source of revenue is considered as the
excess of the total of revenue from that source over the tax deductible costs, generated in a given tax year.
Generally if the taxpayer receives income from more than one source a sum of the income from all sources
is subject to taxation. However, the loss incurred over the fiscal year may lower the income derived only
from that source of revenue for five subsequent fiscal years (no more than 50% of the amount of loss in
any of the years).
19
The tax schedule is as follows:
Tax base (in PLN)
Tax amount
Over
Below
0
85 528
85 528
18% of the tax base, less a basic tax credit of PLN 556.02
PLN 14 839.02 + 32% of surplus over PLN 85 528
Individuals are taxed on their own income, but couples married during the whole calender year can opt to
be taxed on their joint income.Provisions of the PIT Act do not apply to (mainly):

revenue from agricultural activities (except for revenue from the so-called „special branches of
agricultural production”) and from forestry;

revenue falling under the provisions of the Act on Inheritance and Donation Tax.
The personal income tax is the central government tax but revenue from this tax is split between
central government and local governments.
I.1. SLOVAK REPUBLIC
In 1998 and 1999 the progressive tax rates were in effect; six tax brackets were established, with the
rates ranging from 15 to 42 percent. For more detail see the following table.
20
Tax brackets
% of tax base exceeding the minimum threshold
from
to
fix value
0
1 992
3 983
5 975
17 925
35 849
1 992
3 983
5 975
17 925
35 849
and more
299
697
1 195
5 019
12 189
15%
20%
25%
32%
40%
42% 1
1. As of 1st January we adopted euro currency, so all tax brackets were correspondingly calculated according to
conversion rate (1 euro = SKK 30.126), the values are rounded
Moreover, special taxation for high income individuals (the surtax) was introduced. If the tax base
exceeded SKK 1,080,000, the final calculated tax was additionally taxed according to the following table:
Value of calculated tax
from
to
Additional
taxation
12 189
42 302
5%
42 302
132 643
10%
132 643
298 267
20%
and more
30%.2
298 267
st
2. As of 1 January we adopted euro currency, so all tax brackets were correspondingly calculated according to
conversion rate (1 euro = SKK 30.126), the values are rounded
As from 2012 non-taxable dividend income (dividends are not taxed at all) in Slovak republic are
subject to health insurance contributions. The rate applied for health contribution from dividend is equal to
10% and the maximum assessment base is equal to 36-times of average wage per year. As from 2013 the
rate has been increased from 10% to 14% and maximum assessment base has been increased to 120-times
of the average wage per year.
I.1. SLOVENIA
Between 2000 and 2005 all taxable income was aggregated on an annual basis and taxed at progressive
rates taking account of the appropriate allowances and deductions. From 2006, the system changed to a
kind of dual income system where the majority of income (ie such as from employment, business ,
agriculture and forestry, rents and royalties) continued to be aggregated and taxed as a whole whereas
income from capital (ie interest, dividends and capital gains) has been taxed at proportionate rates on a
schedular basis. The tax rates applying to the latter between 2006 and 2013 have been as follows:

Interest -
15% in 2006 and 2007; 20% from 2008 to 2012, 25 % from 2013

Dividends -
20% till 2012, 25 % from 2013
21

Capital gains - Regressive rates declining from 25 per cent to nil depending on the holding
period. The zero rate applies when the holding period is 20 years or more. Till 2012 the top rate
was 20 %
I.1. SPAIN
Since 1 January 2007 a new system of personal and family allowances apply. Concretely for the 2013
tax period the following personal and family allowances are granted to taxpayers:

a personal allowance of € 5 151 for individual taxpayers under 65 years of age (filing
individually or jointly tax returns)
 Taxpayers over 65 years old are granted with an additional allowance of € 918, and taxpayers
older than 75 may increase (additionally as well) their personal allowance by € 1 122

A family allowance for dependent children of € 1 836 for the first child; € 2 040 for the second
child; € 3 672 for the third child, and € 4 182 for any other child

A childcare allowance of € 2 244 for children under 3 years of age

Taxpayers’ ascendant allowance of € 918 for each dependent ascendant older than 65 years of
age, and an additional allowance of € 1 122 for those older than 75 years of age

Disabled taxpayer allowance of € 2 316 per taxpayer and for each entitled disabled
ascendant/descendant. An increased allowance of € 7 038 for severely disabled taxpayers and
ascendants/descendants is also applied. Additionally, those taxpayers requiring third person’s
assistance or with reduced mobility are granted with a € 2 316 allowance
Personal and family allowances are not taxed because they are subject to a zero tax rate.
Different types of income are pooled and offset according to its source, and are classified in two parts:
the general income tax base and the saving income tax base
Next table shows general government tax rates to be applied to the general tax base during 2012 &
2013
Net tax base
Up to €
Gross amount due
€
Rest of tax base
Up to €
Tax rate
%
0.00
17,707.20
33,007.20
53,407.20
120,000.20
175,000.20
300,000.20
0.00
2,557.67
4,705.67
9,091.67
26,072.88
41,197.88
78,072.88
17,707.20
15,300.00
20,400.00
66,593.00
55,000.00
125,000.00
above
12.75
16.00
21.50
25.50
27.50
29.50
30,50
The savings tax base for tax years 2012 & 2013 is subject to the following tax rates:
Net tax base
Up to €
Gross amount due
€
Rest of tax base
Up to €
Tax rate
%
22
0.00
6,000.00
24,000.00
0.00
690.00
3,390.00
6,000.00
18,000.00
above
11.50
14.50
16.50
Since 1 January 2003 the personal allowance granted for each individual reaches the amount of € 3
400. For married couples filing jointly the allowance amounts to € 3 400 for each household member. This
figure is € 5 550 for heads of households.
The following amounts apply for tax years prior to 2003: A personal allowance of € 3 305.57 (ESP
550 000 in the last few years) is granted for each individual. For married couples filing jointly the
allowance amounts to € 6 611.13 (ESP 1 110 000 in the last few years). This figure is € 5 409.11 (ESP 900
000 in the last few years) for heads of households.
I.1. SWITZERLAND
The reported central government personal income tax rates and thresholds for single people without
children.
The central government personal income tax rates and thresholds as of 2012 for married couples and
singles with children are as follows:
Rate per cent
0
1
2
3
4
5
6
7
8
9
10
11
12
13
Ceiling (SFR)
28 300
50 900
58 400
75 300
90 300
103 400
114 700
124 200
131 700
137 300
141 200
143 100
145 000
895 900
Tax amounts under CHF 25 are not levied. Above CHF 755 200 for a single person and CHF 895 800
for married couples and singles with children, all income is taxed at a flat rate of 11.5 per cent. Married
couples are taxed jointly.
I.1. UNITED KINGDOM
Taxable income is defined as gross income for income tax purposes less allowances and reliefs
available at the marginal rate.
In 2010-11, taxpayers are liable at the starting rate of 10 per cent on the first £2 440 of savings income
unless their non-savings income exceeds the starting rate limit. Taxpayers without savings income in the
starting rate band are liable at the basic rate of 20 per cent on the first £37 400 of all income except for
dividends where the rate is 10 per cent. The rate of tax on taxable income between £37 400 and £150,000
is 40 per cent except for dividend income where it is 32.5 per cent. The rate of tax on taxable incomes in
excess of £150,000 is 50 per cent except for dividend income where it was 42.5 per cent.
23
From April 2010 the Personal allowance was reduced for individuals with incomes after deductions in
excess of £100,000 at a rate of £1 of allowance for every £2 on income. In 2010-11, the Personal
Allowance was £6,475 and therefore was tapered to zero by £112,950.
From April 2008 the the basic rate for non-savings income was reduced from 22 per cent to 20 per
cent and the 10 per cent starting rate band was removed for non-savings income. There is now a 10 per
cent starting rate for savings income only.
Previously taxpayers were liable at the starting rate of 10 per cent on the first £2 230 in 2007-08 of all
taxable income. On the next £32 370 in 2007-08 they were liable at the basic rate of 22 per cent on all
income except for dividends and other savings income where the rates were 10 per cent and 20 per cent
respectively. The rate of tax on taxable income over £34 600 in 2007-08 was 40 per cent except for
dividend income where it was 32.5 per cent.
Before Independent taxation was introduced in 1990, the tax system tended to treat married couples as
one unit for income tax purposes and gave married men a higher personal allowance than single taxpayers.
These are given in the table below. In addition, wives’ earnings received an additional relief or allowance.
Year
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
Personal
allowance for
married men
2,145
2,445
2,795
3,155
3,455
3,655
3,795
4,095
4,375
I.1. UNITED STATES
Beginning in 2001, a 10 per cent tax rate was added that applies to the first $6,000 of taxable income
($7,000 in 2003). The taxable income threshold is adjusted for inflation.
Part I, Table 2
I.2. BELGIUM
The representative sub-central government tax rate is an average of sub-central rates.
From 2002, the regions may set a flat or progressive surtax or rebate based upon the federal PIT.
Starting from 1.1.2007 a rebate was introduced for taxpayers liable to personal income tax living in the
Flemish Region and having a yearly net earned income (NEI), excluding replacement income and
excluding separately taxed income, of at least 5 500 euro. The Flemish rebate was abolished from
1.1.2011..
2010
Net earned income (NEI) in €
NEI < 5 500.00
5 500.00 ≤ NEI ≤ 17 250.00
17 250.00 ≤ NEI ≤ 18 500.00
Flemish rebate in €
0
125.00
125.00 – 0.10 (NEI – 17.250,00)
24
NEI > 18 500.00
0
2009
Net earned income (NEI) in €
NEI < 5 500.00
5 500.00 ≤ NEI ≤ 22 000.00
NEI > 22 000.00
Flemish rebate in €
0
300.00
250.00
2008
Net earned income (NEI) in €
NEI < 5 500.00
5 500.00 ≤ NEI ≤ 21 000.00
21 000.00 < NEI ≤ 23 000.00
NEI > 23 000.00
Flemish rebate in €
0
200.00
200.00 - 0.10 (NEI – 21 000.00)
0
2007
Net earned income (NEI) in €
NEI < 5 500.00
5 500.00 ≤ NEI ≤ 21 000.00
21 000.00 < NEI ≤ 22 250.00
NEI > 22 250.00
Flemish rebate in €
0
125.00
125.00 - 0.10 (NEI – 21 000.00)
0
I.2. CANADA
The representative sub-central government tax rate is for the Province of Ontario, where the largest
city in Canada, Toronto is located.
Starting in 2000 most provinces, with the exception of Quebec, have adopted a new approach to
calculating provincial Personal Income Taxes. The Federal Government had agreed to administrate
provincial income tax as a percentage of Taxable Income rather than as a percentage of Basic Federal Tax.
In addition, some provinces impose a provincial surtax.
Provincial Income Tax Rates: Basic Provincial Tax
2013
(1)
Province
Newfoundland
Prince Edward Island
Nova Scotia
New Brunswick
(2)
Taxable income
0 – 33 748
33 748 – 67 496
67 496 and over
0 – 31 984
31 984 – 63 969
63 969 – and over
0 – 29 590
29 590 – 59 180
59 180 – 93 000
93 000 – 150 000
150 000 and over
0 – 38 954
38 954 – 77 908
2012
(3)
(4)
Rate
Surtax
7.70
12.50
13.30
9.80
13.80
16.70
8.79
14.95
16.67
17.50
21.00
9.39
13.46
10
(5)
Taxable income
0 – 32 893
32 893 – 65 785
65 785 and over
0 – 31 984
31 984 – 63 969
63 969 – and over
0 – 29 590
29 590 – 59 180
59 180 – 93 000
93 000 – 150 000
150 000 and over
0 – 38 190
38 190 – 76 380
(6)
(7)
Rate
Surtax
7.70
12.50
13.30
9.80
13.80
16.70
8.79
14.95
16.67
17.50
21.00
9.10
12.10
10
25
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Quebec**
77 908 – 126 662
126 662 and over
0 – 39 723
39 723 – 79 448
79 448 – 509 000
509 000 and over
0 – 31 000
31 000 – 67 000
67 000 and over
0 – 42 906
42 906 – 122 589
122 589 and over
All income
0 – 37 568
37 568 – 75 138
75 138 – 86 268
86 268 – 104 754
104 754 and over
0 – 41 095
41 095 – 82 190
82 190 – 100 000
100 000 and over
14.46
16.07
5.05
9.15
11.16
13.16
10.80
12.75
17.40
11.00
13.00
15.00
10.00
5.06
7.70
10.50
12.29
14.70
16.00
20.00
24.00
25.75
20 – 56
76 380 – 124 178
124 178 and over
0 – 39 020
39 020 – 78 043
78 043 –500 000
500 000 and over
0 – 31 000
31 000 – 67 000
67 000 and over
0 – 42 065
42 065 – 120 185
120 185 and over
All income
0 – 37 013
37 013 – 74 028
74 028 – 84 993
84 993 – 103 205
103 205 and over
12.40
14.30
5.05
9.15
11.16
12.16
10.80
12.75
17.40
11.00
13.00
15.00
10.00
5.06
7.70
10.50
12.29
14.70
0 – 40 100
40 100 – 80 200
80 200 and over
16.00
20.00
24.00
2011
(1)
Province
Newfoundland
Prince Edward Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
20 –
56
2010
(2)
(3)
(4)
(5)
(6)
(7)
Taxable income
Rate
Surtax
Taxable income
Rate
Surtax
0 – 31 904
31 904 – 63 807
63 807 and over
0 – 31 984
31 984 – 63 969
63 969 – and over
0 – 29 590
29 590 – 59 180
59 180 – 93 000
93 000 – 150 000
150 000 and over
0 – 37 150
37 150 – 74 300
74 300 – 120 796
120 796 and over
7.70
12.50
13.30
9.80
13.80
16.70
8.79
14.95
16.67
17.50
21.00
9.10
12.10
12.40
14.30
0 – 37 774
37 774 – 75 550
75 550 – and over
5.05
9.15
11.16
0 – 31 000
31 000 – 67 000
67 000 and over
0 – 40 919
40 919 – 116 911
116 911 and over
All income
0 – 36 146
36 146 – 72 293
72 293 – 83 001
83 001 – 100 787
100 787 and over
10.80
12.75
17.40
11.00
13.00
15.00
10.00
5.06
7.70
10.50
12.29
14.70
10
20 – 56
0 – 31 278
31 278 – 62 556
62 556 and over
0 – 31 984
31 984 – 63 969
63 969 – and over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 – 150 000
150 000 and over
0 – 36 421
36 421 – 72 843
72 844 – 118 427
118 427 and over
7.70
12.65
14.40
9.80
13.80
16.70
8.79
14.95
16.67
17.50
21.00
9.30
12.50
13.30
14.30
0 – 37 106
37 106 – 74 214
74 214 – and over
5.05
9.15
11.16
0 – 31 000
32 000 – 67 000
67 000 and over
0 – 40 354
40 354 – 115 297
115 297 and over
All income
0 – 35 859
35 859 – 71 719
71 719 – 82 342
82 342 – 99 987
99 987 and over
10.80
12.75
17.40
11.00
13.00
15.00
10.00
5.06
7.70
10.50
12.29
14.70
10
20 –
56
26
Quebec**
0 – 39 060
39 060 – 78 120
78 120 and over
0 – 38 570
38 570 – 77 140
77 140 and over
16.00
20.00
24.00
2009
(1)
Province
2008
(2)
Taxable income
0 – 31 061
31 061 – 62 121
62 121 and over
(3)
Rate
7.70
12.80
15.50
Prince Edward
Island
0 – 31 984
31 984 – 63 969
63 969 – and over
9.80
13.80
16.70
Nova Scotia
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
8.79
14.95
16.67
17.50
New Brunswick
0 – 35 707
35 707 – 71 415
71 415 – 116 105
116 105 and over
9.65
14.50
16.00
17.00
Ontario
0 – 36 848
36 848 – 73 698
73 698 – and over
6.05
9.15
11.16
Manitoba
0 – 31 000
31 000 – 67 000
67 000 and over
10.80
12.75
17.40
Saskatchewan
0 – 40 113
40 113 – 114 610
114 610 and over
11.00
13.00
15.00
All income
0 – 35 716
35 716 – 71 433
71 433 – 82 014
82 014 – 99 588
99 588 and over
0 – 38 385
38 385 – 76 770
76 770 and over
10.00
5.06
7.70
10.50
12.29
14.70
16.00
20.00
24.00
Newfoundland
Alberta
British Columbia
Quebec**
16.00
20.00
24.00
(4)
Surtax
10
10
20 – 56
(5)
Taxable income
0 – 30 215
30 215 – 60 429
60 429 and over
0 – 31 984
31 984 – 63 969
63 969 – and
over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
0 – 34 836
34 836 – 69 673
69 673 – 113
273
113 273 and
over
0 – 36 020
36 020 – 72 041
72 041 – and
over
0 – 30 544
30 544 – 66 000
66 000 and over
0 – 39 135
39 135 – 111
814
111 814 and
over
All income
0 – 35 016
35 016 – 70 033
70 033– 80 406
80 406 – 97 636
97 636 and over
0 – 37 500
37 500 – 75 000
75 000 and over
2007
(6)
Rate
8.20
13.30
16.00
9.80
13.80
16.70
10
8.79
14.95
16.67
17.50
10
10.12
15.48
16.80
17.95
6.05
9.15
11.16
20 –
56
10.90
12.75
17.40
11.00
13.00
15.00
10.00
5.24
7.98
10.50
12.29
14.70
16.00
20.00
24.00
2006
(1)
(2)
(3)
(4)
(5)
(6)
Province
Taxable income
Rate
Surtax
Taxable income
Rate
Newfoundland
0 – 29 886
29 886 – 59 772
59 772 and over
(7)
Surtax
9.64
14.98
17.26
4.5
0 – 29 590
29 590 – 59 180
59 180 and over
10.57
16.16
18.02
(7)
Surta
x
9
27
Prince Edward
Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Quebec**
0 – 31 369
31 369 – 62 739
62 739 and over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
0 – 34 186
34 186 – 68 374
68 374 – 111 161
111 161 and over
9.80
13.80
16.70
8.79
14.95
16.67
17.50
10.12
15.48
16.80
17.95
0 – 35 488
35 488 – 70 976
70 976 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 38 405
38 405 – 109 729
109 729 and over
All income
0 – 34 397
34 397 – 68 794
68 794 – 78 984
78 984 – 95 909
95 909 and over
0 – 29 290
29 290 – 58 595
58 595 and over
10.90
13.00
17.40
11.00
13.00
15.00
10.00
5.70
8.65
11.10
13.00
14.70
16.00
20.00
24.00
10
10
20 – 56
0 – 30 754
30 754 – 61 509
61 509 and over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
0 – 33 450
33 450 – 66 902
66 902 – 108 768
108 768 and over
9.80
13.80
16.70
8.79
14.95
16.67
17.50
9.68
14.82
16.52
17.84
0 – 34 758
34 758 – 69 517
69 517 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 37 579
37 579 – 107 367
107 367and over
All income
0 – 33 755
33 755 – 67 511
67 511 -77 511
77 511 – 94 121
94 121 and over
0 – 28 710
28 710 – 57 430
57 430 and over
10.90
13.50
17.40
11.00
13.00
15.00
10.00
6.05
9.15
11.70
13.70
14.70
16.00
20.00
24.00
2005
(1)
Province
Newfoundland
Prince Edward
Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
(2)
Taxable income
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 754 – 61 509
61 509 – and over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
0 – 32 730
32 730– 65 462
65 462 – 106 427
106 427 and over
(3)
Rate
10.57
16.16
18.02
9.80
13.80
16.70
8.79
14.95
16.67
17.50
9.68
14.82
16.52
17.84
0 – 34 010
34 010 – 68 020
68 020 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 36 770
36 770 – 105 056
105 056 and over
All income
0 – 33 061
33 061 – 66 123
10.90
14.00
17.40
11.00
13.00
15.00
10.00
6.05
9.15
10
10
20 –
56
2004
(4)
Surtax
9
10
10
20 – 56
(5)
Taxable income
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 754 – 61 509
61 509 and over
0 – 29 590
29 590 – 59 180
59 180 -93 000
93 000 and over
0 – 32 183
32 183 – 64 368
64 368 – 104 648
104 648 and over
(6)
Rate
10.57
16.16
18.02
9.80
13.80
16.70
8.79
14.95
16.67
17.50
9.68
14.82
16.52
17.84
0 – 33 375
33 375 - 66 752
66 752 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 36 155
36 155 – 103 300
103 300 and over
All income
0 – 32 476
32 476 – 64 954
10.90
14.00
17.40
11.00
13.00
15.00
10.00
6.05
9.15
(7)
Surtax
9
10
10
20 –
56
28
Quebec**
66 123 – 75 917
75 917 – 92 185
92 185 and over
0 – 28 030
28 030 – 56 070
56 070 and over
11.70
13.70
14.70
16.00
20.00
24.00
64 954 - 74 575
75 575 – 90 555
90 555 and over
0 – 27 635
27 635 – 55 280
55 280 and over
11.70
13.70
14.70
16.00
20.00
24.00
2003
(1)
Province
Newfoundland
Prince Edward
Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Quebec**
(2)
Taxable income
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 754 – 61 509
61 509 – and over
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 32 183
32 183 – 64 368
64 368 – 104 648
104 648 and over
(3)
Rate
10.57
16.16
18.02
9.80
13.80
16.70
9.77
14.95
16.67
9.68
14.82
16.52
17.84
0 – 32 435
32 435 – 64 871
64 871 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 35 000
35 000 – 100 000
100 000 and over
13 525 and over
0 – 31 653
31 653 – 63 308
63 308 – 72 685
72 685 – 88 260
88 260 and over
0 – 27 095
27 095 – 54 195
54 195 and over
10.90
14.90
17.40
11.00
13.00
15.00
10.00
6.05
9.15
11.70
13.70
14.70
16.00
20.00
24.00
2002
(4)
Surtax
9
10
10
20 – 56
(5)
Taxable income
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 754 – 61 509
61 509 – and over
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 31 677
31 677 – 63 354
63 354 - 103 000
103 000 and over
(6)
Rate
10.57
16.16
18.02
9.80
13.80
16.70
9.77
14.95
16.67
9.68
14.82
16.52
17.84
0 – 31 893
31 893 – 63 786
63 786 – and over
6.05
9.15
11.16
0 – 30 544
30 544 – 65 000
65 000 and over
0 – 30 000
30 000 – 60 000
60 000 and over
13 339 and over
0 – 31 124
31 124 – 62 249
62 249 - 71 470
71 470 – 86 785
86 785 and over
0 – 26 700
26 700 – 53 405
53 405 and over
10.90
15.40
17.40
11.25
13.25
15.50
10.00
6.05
9.15
11.70
13.70
14.70
16.00
20.00
24.00
2001
(1)
Province
Newfoundland*
Prince Edward
Island
Nova Scotia
New Brunswick
Ontario
(2)
Taxable income
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 – 61 509
61 509 – and over
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 754
30 754 – 61 509
61 509 – 100 000
100 000 and over
0 – 30 814
30 814 – 61 629
(3)
Rate
10.57
16.16
18.02
9.80
13.80
16.70
9.77
14.95
16.67
9.68
14.82
16.52
17.84
6.16
9.22
(7)
Surtax
9
10
10
20 –
56
2000
(4)
Surtax
9
10
10
(5)
Taxable income
0 –29,590
29,590 – 59 180
59 180 and over
0 – 30 004
30 004 – 60 009
60 009 – and over
0 – 29 590
29 590 – 59 180
59 180 and over
(6)
Rate
10.54
16.12
17.98
9.80
13.80
16.70
9.77
14.95
16.67
0 – 29 590
29 590 – 59 180
59 180 and over
9.94
15.21
16.96
0 – 30 004
30 004 – 60 009
6.37
9.62
(7)
Surtax
16
10
10
8
29
Manitoba
Saskatchewan*
Alberta*
British Columbia
Quebec**
61 629 – and over
11.16
0 – 30 544
30 544 – 61 089
61 089 and over
0 – 30 000
30 000 – 60 000
60 000 and over
10.90
16.20
17.40
11.50
13.50
16.00
12 900 and over
10.00
0 – 30 484
30 484 – 60 969
60 969 – 70 000
70 000 – 85 000
85 000 and over
0 – 26 000
26 000 – 52 000
52 000 and over
7.30
10.50
13.70
15.70
16.70
17.00
21.25
24.50
20 – 56
60 009 – and over
11.16
0 – 29 590
29 590 – 59 180
59 180 and over
0 – 30 000
30 000 – 60 000
60 000 and over
0 – 30 004
30 004 – 60 009
60 009 and up
8.00
12.22
13.63
8.16
12.00
13.92
7.48
11.00
12.76
0 – 30 004
30 004 – 60 009
60 009 and over
8.40
12.40
14.35
0 – 26 000
26 000 – 52 000
52 000 and over
19.00
22.50
25.00
20 –
56
* These provinces have provincial tax rates as a per cent of Basic Federal Tax in 2000.
** In Quebec all taxpayers receive a Quebec Abatement. The abatement consists of a reduction of 16.5 per cent of federal personal income tax.
Various provinces provide tax relief to low-income earners in the form of targeted tax reductions and
some provinces levy surtaxes, which primarily affect high-income earners.
The rates in the columns 4 and 7 are expressed as a percentage of sub-central government tax rates.
I.2. DENMARK
The representative sub-central government tax rate is an average of municipal and regional rates.
From 2007 the regions no longer collects taxes, and the representative sub-central government tax rate is
then an average of municipal rates.
I.2. FINLAND
The representative sub-central government tax rate is an weighted average of municipal rates.
A standard deduction for work-related expenses equal to the amount of wage or salary, with a
maximum amount of EUR 620 is granted.
An earned income tax allowance is granted municipal taxation. The allowance is calculated on the
basis of taxpayer’s income from work. The allowance amounts to 51 per cent of income between EUR 2
500 and EUR 7 230, and 28 per cent of the income exceeding EUR 7 230, until it reaches its maximum of
EUR 3 570. The amount of the allowance is reduced by 4.5 per cent of the earned income minus work
related expenses exceeding EUR 14 000.
A basic tax allowance is granted in municipal taxation on the basis of taxable income remaining after
the other allowances have been subtracted. The maximum amount, EUR 2 880, is reduced by 20 per cent
of the income exceeding EUR 2 200.
I.2. ICELAND
The representative sub-central government tax rate is an average of municipal rates.
30
I.2. ITALY
These surcharges are due only by taxpayers who actually pay the Personal Income Tax (IRPEF).
Representative sub-central rate
The representative sub-central government tax rates are:
Year
1998
1999
2000
2001
2002
2003
2006
2007
2008
2009
2010
2011
2012
Regional surcharge tax (Lazio)
0.5%
0.5%
0.9%
0.9%
0.9%
0.9%
1.4%
1.4%
1.4%
1.4%
1.7%
1.7%
1.73%
Local surcharge tax (Rome)
----0.2%
0.2%
0.2%
0.5%
0.5%
0.5%
0.5%
0.9%
0.9%
Regional surcharge tax
This surcharge tax was introduced in 1997. The tax may be levied by each region on resident
taxpayers’ total taxable income at a discretionary rate included in a given range. As from the year 2000 this
range was 0.9% - 1.4%. Law Decree 201/2011 (later converted in Law 214/211) increased the basic
regional surcharge tax rate from 0.9% to 1.23% (the legislation was retroactive, thus applied also for
2011): since then, the new basic range is 1.23% - 1.73%.
For a group of Regions (see the Table below), the regional surcharge tax rate was further increased of
0.30% (starting from the biennium 2011/2012) due to regional budget deficit (bringing the maximum rate
applied up to 2.03%).
In addition to this, the Spending Review Decree advanced from 2014 to 2013 the possibility to apply
a further increase of 0.6% in the Regions with persistent health budget deficit.
Regional Surcharge Tax Rates
For 2011/2012 in Lazio the Regional surcharge tax rate was 1.73%, due to: the increase of the basic
regional surcharge tax rate from 0.9% to 1.23% and the additional charge of 0.50% applied to balance the
Regional health budget deficit. Taking into account the possibility introduced by the Spending Review
Decree (see above) the PIT tax rate of 1.73% applied in Lazio could be further increased up to 2.33%.
Regional Surcharge Tax Rates
Region
Abruzzo
Basilicata
Bolzano
2013
Taxable income
P.I.T. tax base
P.I.T. tax base
P.I.T. tax base
Note: the regional surcharge tax is not levied on:

Taxpayers earning a taxable income up to 15.000
Rate
1.73%
1.23%
1.23%
31
euros
Taxpayers earning a taxable income up to 70.000,
with dependent children, can benefit from a tax
credit (not refundable) of € 252 for each child
P.I.T. tax base
P.I.T. tax base
0
15 000
0
20 000
0
25 000
More than 25 000
Note: For each income class, a single tax rate is always
applied on the total amount of income
0
15 000
Note: For each income class, a single tax rate is always
applied on the total amount of income
P.I.T. tax base
0
20 000
More than 20 000
Notes:
 Each surcharge tax rate of is always applied on the
total amount of income;
 For taxpayers with at least four dependent children, the
regional surcharge tax is levied at a rate of 1.23%;
 For incomes between 20,000.01 and 20,101.76 the
amount of tax due, determined using the rate of 1.734%
is reduced by a corresponding amount which is obtained
multiplying the coefficient 0.9827 for the difference
between 20,101.76 euros and the amount of taxable
income RV1:

Calabria
Campania
Emilia Romagna
Friuli Venezia Giulia
Lazio
Liguria
2.03%
2.03%
1.43%
1.53%
1.63%
1.73%
0.70%
1.23%
1,73%
1.23%
1.73%
RV 1*1.73
 0.9827 * 20 ,101 .76  RV 1
100
Lombardia
Marche
Molise
Piemonte
Puglia
Sardegna
Sicilia
Toscana
0
15 000,01
28 000
0
15 000.01
28 000.01
55 000.01
More than 75 000
P.I.T. tax base
0
0
15 000
28 000
15 000
28 000
55 000
75 000
15 000
22 000
1.23%
1.58%
1,73%
1.23%
1.53%
1.70%
1.72%
1.73%
2.03%
1.23%
1.53%
More than 22 000
Note: For each income class, a single tax rate is always
applied on the total amount of income
1.73%
0
15,000.01
More than 28 000
P.I.T. tax base
P.I.T. tax base
0
1.33%
1.43%
1,73%
1.23%
1.73%
1.43%
15,000
28 000
28 000
32
Trento
28 000.01
More than 55 000
P.I.T. tax base
0
More than 15 000
55 000
15 000
Umbria
Valle d'Aosta
Veneto
Note: For each income class, a single tax rate is always
applied on the total amount of income
P.I.T. tax base
P.I.T. tax base
1.68%
1.73
1.23%
1.23%
1.43%
1.23%
1.23%
Local surcharge tax
This surcharge tax was introduced in 1999. The tax may be levied by each local government at an
initial rate that cannot exceed 0.2%. If the tax is levied, the local government can increase the initial rate,
on a yearly basis, up to a maximum of 0.5%.
For the city of Rome, the local surcharge tax is levied at an increased rate of 0.9% (higher than the
maximum tax rate), due to municipal budget deficit.
I.2. KOREA
A uniform sub-central government tax rate of 10 per cent is used as a representative rate. The local
government can adjust the rate between a lower limit of 5 per cent and an upper limit of 15 per cent.
However, in practice all use the 10 per cent rate.
I.2. NORWAY
Although municipalities and regions are free to use reduced rates, in practice all use the maximum
applicable rate - which is therefore also a representative rate.
Personal income (i.e. ordinary income) is taxed with a 28 per cent flat rate in most of the country.
Ordinary income includes all income (e.g. from labour, capital and pensions) less allowances.
The revenue from the personal income tax on ordinary income is split between three levels of
government: central, state and local. The split is decided upon by the Parliament as part of the National
Budget. The state and local government tax rate is therefore the state and local government revenue share
of tax on ordinary income. As mentioned, state and local governments may in principle reduce the local tax
rate to a lower level, but in practice all use the maximum rates.
The personal income tax rate on ordinary income is the same as the corporate tax rate. Any change in
the rate will thus apply for both corporate and personal income tax.
I.2. PORTUGAL
As from 1999, special reduced rates apply in the case of residents in the Azores Autonomous Region
(where the national rates are multiplied by 0.80) and as from 2001 in the Madeira Autonomous Region.
I.2. SPAIN
Until 2002, the Autonomous regions had the possibility of modifying their share in the income tax
liability up to an amount of  20% by changing the regional tax schedule set up by central government,
33
keeping a progressive rate structure.
As of 2003, the  20% restriction was abolished and the Autonomous regions are liable to keep a
progressive rate schedule with the same number of tax brackets as the central government.
Different types of income are pooled and offset according to its source, and are classified in two parts:
the general income tax base and the saving income tax base
Since 2011, the Autonomous regions are liable to set up their own personal income tax schedule to tax the
general income tax base. Next table shows the most common tax rates schedule applied by regional
governments to the general tax base.
Net tax base
Up to €
0.00
17,707.20
33,007.20
53,407.20
Gross amount due
€
0.00
2,124.86
4,266.86
8,040.86
Rest of tax base
Up to €
17,707.20
15,300.00
20,400.00
above
Tax rate
%
12.00
14.00
18.50
21.50
The savings tax base is subject to the following tax rates:

Up to € 6 000

€ 6 001 and over
9.5%
10.50%
I.2. SWEDEN
The representative sub-central government tax rate is an average of municipal rates.
I.2. SWITZERLAND

Representative sub-central rate: City of Zurich in the canton of Zurich.

Minimum sub-central rate: City of Zug in the canton of Zug.

Maximum sub-central rate: Delémont in the canton of Jura.

The calculations do not take into account the church tax.
I.2. UNITED STATES
The representative sub-central state rate is a weighted average state marginal income tax rate on
wages provided by the National Bureau of Economic Research (www.nber.org). Most states that impose
personal income taxes allow personal allowances. The amount of those allowances varies. Seven states
(and many localities) do not impose personal income tax.
For 2005 through 2007, the maximum sub-central rate applies to California where the largest city, Los
Angeles, does not impose personal income tax. For 2001 through 2004, the maximum sub-central state
rate applies to Rhode Island where the largest city, Providence, does not impose personal income tax. For
2000, the maximum sub-central rate applies to California where the largest city, Los Angeles, does not
impose personal income tax
34
The taxing wages sub-central rate is for Detroit, Michigan. Michigan allowed a tax credit for city
income taxes paid through 2011. The tax credit was 20 per cent of city income taxes of $100 or less, 10 per
cent of city income taxes of $101 through $150 and 5 per cent for city income taxes of $151 or more. The
maximum credit was $10,000.
35
Part I, Table 3
I.3. CANADA
Rates administered in the largest city in Canada, Toronto, located in province of Ontario.
I.3. SPAIN
Since 2007, capital gains form part of the taxpayer’s savings tax base, and are subject to a single flat
tax rate of 18% (11.1% for central government, and 6.9% for the regions). For tax years 2012 and 2013,
following tax rates apply:
Central Government
tax rate
11,50%
Regional Government
tax rate
9,50%
21,00%
From € 6 000 up to € 24
000
14,50%
10,50%
25.00%
Over € 24 000
16,50%
10,50%
27.00%
Up to € 6 000
Total
Capital gains with a holding period above one year were taxed (until 2006) at a flat tax rate of 15%
(9.06% for central government, and 5.94 % for the regions) as of 2003. In previous years the applied rate
was 18% (12.06% for central government, and 5.94% for the regions).
I.3. SWITZERLAND
1)
The sub-central (cantonal) personal income tax rates in Zürich (most populated city) and thresholds
for single people without children for 2013, are:
Rate per cent
0
2
3
4
5
6
7
8
9
10
11
12
13
2)
Ceiling (SFR)
6 700
11 400
16 100
23 700
33 000
43 700
56 100
73 000
105 500
137 700
188 700
254 900
over 254 900
The sub-central (cantonal) personal income tax rates in Zürich (most populated city) and thresholds
for married couples and singles with children for 2013:
Rate per cent
0
Ceiling (SFR)
13 500
36
2
3
4
5
6
7
8
9
10
11
12
13
19 600
27 300
36 700
47 400
61 300
92 100
122 900
169 300
224 700
284 800
354 100
over 354 100
Married couples are taxed jointly.
PART II. TAXATION OF CORPORATE AND CAPITAL INCOME
Part II, Table 1
II.1. BELGIUM
The effective CIT rate can be substantially reduced by an allowance for corporate equity (ACE). The
amount of this allowance is neither related to the behaviour nor to the results of the company, but depends
only upon the amount of qualifying corporate equity and the yield on long term government bonds. There
is however an upper limit. The original upper limit (of 6.5 % for non-SMEs) was first temporarily reduced
to 3.8% in 2010 and 2011 and then permanently lowed to 3% from 2012 onwards. The effectively applied
ACE-rates are listed in the table below. Stricter carry forward rules concerning unused ACE-deductible
amounts were implemented from 2013 onwards.
Notional interest
rate (ACE-rate)
Non-SMEs
Small and medium
enterprises
(SMEs)
2006
2007
2008
2009
2010
2011
2012
2013
3.442%
3.781%
4.307%
4.473%
3.8%
3.425%
3%
2.742%
3.942%
4.281%
4.807%
4.973%
4.3%
3.925%
3.5%
3.242%
The lower the return on equity before tax, the lower the effective tax rate due to this allowance for
corporate equity. E.g. the effective tax rate is only half the nominal tax rate when the return on equity
before tax is twice the notional interest rate. The following table illustrates the impact of the ACE on the
effective tax rate when the gross return on equity equals respectively 2, 3 or 4 times the notional interest
rate.
non-SMEs 2013
Gross return on equity (gROE)
gROE / ACE-rate
without ACE
gROE = 2 ACErate
gROE = 3 ACErate
gROE = 4 ACErate
5.484
5.484
8.226
10.968
2
2
3
4
37
ACE-rate 2013
Taxbase
Nominal CIT rate
CIT
Net profit
Effective CIT rate
0
2.742
2.742
2.742
5.484
33,99%
2,328
4,522
33.990%
2.742
33,99%
0.932
4.552
16.995%
5.484
33,99%
1.864
6.362
22.660%
8.226
33,99%
2.796
8.172
25.493%
II.1. CANADA
The representative sub-central government tax rate is an average of provincial corporate income tax
rates, weighted by the provincial distribution of the federal corporate taxable income.
A federal surtax increased the general federal corporate income tax rate by 1.12 per cent between
1995 and 2007. Budget 2006 eliminated this surtax for all corporations as of January 1, 2008.
II.1. CHILE
Business profits made by individuals or legal entities resident or domiciled in Chile are taxed via the
First Category Tax (FCT) levied at a tax rate of 20%. It applies to profits from any commercial activity
whether the enterprise is a legal entity, a branch, a permanent establishment of a foreign company, sole
proprietorship or an individual. The tax base is defined as total income less the costs and expenses
required to produce it taking into account inflation adjustments. A loss incurred may be carried back
and/or forward and deducted against profits without time limit.- It may also be offset against previous
retained earnings in a kind of carry-back.
Individuals and legal entities that are not resident or domiciled in Chile are generally taxed on any
income derived from Chilean sources at a standard tax rate of 35% (lower rates apply for some types of
income and are available under double taxation agreements).
II.1. FRANCE
The rates in Table II.1 include surcharges, but do not include the local business tax (Contribution
économique territoriale, a new tax replacing the former Taxe professionnelle from January 1st 2010), the
turnover based solidarity tax (Contribution de Sociale de Solidarité sur les Sociétés), the 5% temporary
surtax applies to the standard corporate income tax liability for large company with a turnover exceeding
€ 250 million, or the 3 % additional contribution on distributed profits.The Contribution Sociale de
Solidarité sur les Sociétés is levied at a rate of 0.16% (0.13% plus a surcharge of 0.03%) of the turnover of
companies, excluding VAT. It is deductible for income tax purposes.
The standard corporate income tax rate is 33.33%. It is increased by a 3,3% surcharge (Contribution
Sociale sur les Bénéfices) for companies with a turnover of at least EUR 7,630,000 on the part of their
liable tax payments in excess of EUR 763,000 - resulting in an effective tax rate of 34.43% for companies
that have profits above EUR 2,289,000.
Starting in 2010, the local business tax (taxe professionelle) is being abolished and replaced with a
new local economic contribution, the contribution économique territoriale (CET). The CET is composed
of two separate taxes, the corporate property contribution (cotisation foncière des entreprises, or CFE) and
the contribution for value added (cotisation sur la valeur ajoutée des entreprises, or CVAE). As
previously, this tax applies to branches and subsidiaries established in France. The tax is capped at 3% of
the company’s value added (the former local business tax was capped at 3.5% of value added).
38
The CFE is based on the value of owned or leased office premises. The productive investments are no
longer taxed, as it was with the previous local business tax, i.e. equipment and movable property which
include machines, tools, movable property and equipment. The CFE is calculated by multiplying the
cadastral value of the premises by a certain coefficient, assessed annually by the local authorities. The local
authorities also set the minimum contribution payable by the companies in their jurisdiction.
The contribution for value added by businesses (CVAE) is assessed on the value added companies
realize during the previous calendar year or the last 12-month financial year if this does not coincide with
the calendar year. It applies to firms concerned by the CFE with turnover exceeding EUR 152,500. Only
companies with annual pre-tax turnover of over EUR 500,000 must pay the CVAE, but all have to declare
the value added created during the fiscal year. The CVAE rate is theoretically 1.5% for companies with an
annual pre-tax turnover of over EUR 50 million. Below this amount, companies are subject to a reduced
CVAE rate, adjusted according to the level of the company turnover. The assessed value added is itself
capped, depending on the case, at 80% or 85% of turnover (depending on whether the company’s turnover
is below or above EUR7,600,000).
II.1. GERMANY
The representative sub-central government corporate income tax rate is for Berlin. In the years
between 2000 and 2007 this rate was 0.05 (general rate) * 410 per cent (local “Hebesatz”) = 20.5 per cent.
As the local business tax was deductible from its own base, the effective rate was 20.5 / 120.5 = 17 per
cent.
This implies that the effective central government corporate income tax rate in 2007 was 26.375 per
cent * (1-0.17) = 21.9 per cent. The combined corporate income tax rate in 2007 was therefore 38.9 per
cent, as it also was in 2006, 2005, 2004, 2002 and 2001. In 2003, the effective central government
corporate income tax rate was 27.96 per cent * (1-0.17) = 23.2 per cent due to a temporary increase in the
tax rate in order to finance the repair of the damages caused by the major floods in 2002. The combined
corporate income tax rate in 2003 was therefore 40,2 per cent. In 2000, the effective central government
corporate income tax rate was 42.2 per cent * (1-0.17) = 35 per cent. The combined corporate income tax
rate was therefore 52 per cent.
With the Corporate Tax Reform in 2008 the representative sub-central government corporate income
tax rate was changed to 14.35 per cent (0.035 general rate * 410 per cent “Hebesatz”). Local business tax is
no longer deductible from its own base. The central government corporate income tax rate was reduced to
15 per cent. The combined corporate income tax rate is now at a level of 30.18 per cent.
II.1. GREECE
In general, the legal form of the company determines the applicable tax rate.
For additional information on data before the year 2012, see the explanatory notes for table II.4.
Corporate Taxation
Under the Income Tax Code (2238/1994), as recently amended with the law 4110/2013, the Basic
Tax Rate for corporate income earned in 2013 is 26%.
The rate is decreased by 40% (so the rate is 60 x 26% = 15,60%) for income earned from business
activities in Greek islands with less than 3100 inhabitants.
39
An additional tax of 3% is levied on gross income derived from immovable property but this tax
cannot exceed the tax calculated on the company’s income.
Legal entities subject to corporate income tax include:
a.
corporations (SAs),
b.
limited liability companies (LLCs),
c.
or not,
d.
state and municipal undertakings and profit-making enterprises, whether they have
legal form
cooperatives and associations,
e. foreign undertakings operating in Greece, in whatever company form, and any other
organizations engaged in business activities,
foreign
f. non-profit-making Greek and foreign legal persons governed by public or private law, including
foundations of all kinds (only for income derived by hiring out immovable property and income from mobile
assets) .
g) private capital companies (PCC) (a new company form introduced with art. 116 of law 4072/2012).
The Law provides certain tax-exemptions. For instance, the Greek State is fully exempt from taxation,
as well as Municipalities, Universities, Hospitals etc., which are only liable to tax in respect of income
from transferable securities. A special tax regime (tonnage tax) applies for the operation of ships under
Greek flag. Additionally, tax exemption applies in any income derived in Greece by foreign legal or
physical persons if this is foreseeable under special provisions of a bilateral Convention of Double
Taxation or a Multirateral International Convention (NATO, U.N., Diplomatic Missions etc.
Furthermore, from 2013 onwards, Holy Churches, Monasteries etc. are liable to tax in respect of
income from immovable property, - same as all the non profit entities, at a flat rate of 26%, which
exhausts their tax liability.
Under the tax law 4110 - enacted in 23 January 2013, distributed profits (approved by the general
meetings as of 1.1.2014 onwards) by Corporations (SAs), in the form of dividends, Board and Directors
fees, additional compensation of directors and employees other than wages, as well as interim dividend
payments are subject to a 10% withholding tax - which exhausts the relevant income tax liability of the
recipients.
In case of a parent-subsidiary relationship, dividend payments and profit distributions paid by subsidiary
permanent establishment companies to their parent companies established in another EU Member-State
shall be exempt from withholding tax provided that the conditions set forth in art. 11 of Law 2578/1998 are
fulfilled (application of the EU Parent-Subsidiary Directive).
Partnerships, joint ventures - other legal entities
40
2000-2012)
TAX RATES FOR LEGAL ENTITIES
(except for those subject to corporate income taxation)
Type of legal person
Limited partnership
(EE) & Unlimited
general partnership
(OE), Civil law
communities
Joint ventures, Civil
companies, , Silent
partnerships and
Participation
companies
Legal services
companies of L.518/89,
Notary companies of
L.284/93
1/1/2000 –
31/12/2004
1/1/200531/12/2005
1/1/200631/12/2006
1/1/200731/12/2007
1/1/2008 31/12/2009
1/1/201031/12/12
24%
22%
20%
20%
20%
35%
32%
29%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
. Partnerships under the Greek Law may be either general or limited partnerships. Under the so far
applicable rules, the above mentioned tax rate of 20% was imposed on the profits relating to partners who
were individuals, following the deduction of their entrepreneurial fee, whereas the profits corresponding to
legal entities partners were taxed at a 25% rate.
The Law 4110 enacted in 23 January 2013 brought significant changes to the tax regime of
partnerships, civil law societies, silent partnerships, participation companies, joint-ventures, legal services
and notary companies, which from 1/1/2013 onwards are taxed with the following tax schedule:
Partnerships, joint ventures - other legal entities maintaining single entry accounting books
(2013 onwards)
Income
bracket
(€)
50.000
Tax rate
(%)
26%
Tax bracket
(€)
13.000
Total amount of
Income (€)
50.000
Tax (€)
13.000
41
Excess
33%
For those entities which maintain double-entry books, their tax treatment is now aligned with that of
corporations (SAs, LLCs and PCCs), which means that the entire amount of their net profits is taxable at
the level of the entity (taxation at the level of the entrepreneur is abolished) at a flat rate of 26% , whereas
a 10% withholding tax is imposed on distributed profits.The entrepreneurial fee received by the general
partner is no longer taxed as personal income deriving from commercial enterprises.
All the above rates are decreased by 40% for income earned from business activities in Greek islands
with less than 3.100 inhabitants.
II.1. HUNGARY
The rates do not include a turnover-based local business tax. Local governments are entitled to levy a
local business tax on corporations in their jurisdiction, which is generally levied on turnover less
acquisition costs of goods sold, subcontractor fees, material costs and costs directly related to R&D
activities. The maximum rate is 2 %, and the tax is deductible for income tax purposes and until 2009 an
additional tax relief was applicable on it (in 2004: 25 %, in 2005: 50 %, and in the period of 2006-2009:
100 %). Some local governments grant exemptions for small businesses.
The rates do not include the innovation tax as well. This tax is levied on the same basis as the local
business tax. The innovation tax rate was 0.2 % in 2004, 0.25 % in 2005, and is 0.3 % from 2006. Small
enterprises are exempted from this tax.
As from 2007 credit institutions are obliged to pay 5 % surtax on interest income from loans
associated with state subsidies. This tax is excluded from the table.
As from 2009 corporations supplying energy products are obliged to pay a surtax of 8 % on the basis
of (adjusted) profit before taxation. This tax is excluded from the table.
In 2005 and 2006 credit institutions and financial enterprises were obliged to pay a special tax on their
interest income (tax rate was 6 %) or on the profit before corporate income tax (tax rate was 8 %). This tax
is excluded from the table.
In the period of 1 September 2006-31 December 2009, taxpayers were obliged to pay a surtax of 4 %
on the basis of (adjusted) profit before taxation.
As from September 2010, financial corporations are obliged to pay a temporary crisis tax, the rate of
which is to be halved in 2013 and abolished from 2014. Different rules have been applicable to institutions
engaged in different activities..
A temporary sectoral crisis tax to be levied in years 2010-12 was introduced also for the energy,
telecommunications and consumer goods retail sectors. The crisis tax is levied on the net sales turnover
realized by corporations in the specific taxable sectors. The crisis tax is excluded from the table.
II.1. ISRAEL
The following table shows the historical tax rates for tax on the combination of wages and salaries and
profits that the Financial Institutions pay in lieu of VAT.
42
Period
1 January 2000 -14 June 2002
15 June 2002- 29 February 2004
1 March 2004- 30 June 2006
1 July 2006- 30 June 2009
1 July 2009 – 31 Dec 2009
1 January 2010 – 31 Aug 2012
1 Sept 2012
Tax rate
(percent)
17
18
17
15.5
16.5
16.0
17.0
II.1. ITALY
Italian Local Income Tax – ILOR
Law no.825 of 1971 introduced local income tax.
This tax was applied:

in the case of individuals wherever resident, on income accrued within the territory of the State,
excluding income from employment calculated for personal income tax purposes;

in the case of legal persons, on the overall net income calculated for the purposes of corporate
income tax .
Although initially the revenue was allocated to local authorities, starting from 1974 the income was
included in the State budget and the tax was no longer considered as local.
The tax was deductible for the purposes of personal income tax, while for the purposes of corporate
income tax, it was deductible from 1971 to 1990, partially deductible in 1991 and non-deductible until its
abolition in 1998.
This tax was abolished with the introduction of IRAP (Regional Tax on Productive Activities).
The Dual Income Tax (DIT)
The Dual Income Tax (DIT) is a special regime for the taxation of business income introduced with
legislative decree n. 446/1997 and aimed at creating incentives for companies to increase selfcapitalization thereby boosting economic activities.
With the DIT, the taxable business income is divided into two segments:
The first segment is an hypothetical return calculated by multiplying any qualifying increase in the net
equity of the company by a nominal interest rate provided by the State, in excess of the net equity at the
end of the taxable year which includes 30th September 1996. This income benefits from a reduced rate for
personal income tax or corporate income tax (IRPEG or IRPEF), generally of 19% (7% for newly-listed
companies).
43
The second segment, which is the difference between taxable business income and the amount
included in the first segment, is subject to the standard tax rates. Anti-avoidance rules have been
introduced in order to prevent the practice of multiplying the basis for calculating the DIT by introducing
several times the same new investments. A special anti-avoidance regime has also been provided for in the
case of groups of companies.
The Super-DIT
The so-called super-DIT regime, which was introduced with Legislative decree 18 January 2000 no.
9, extends the DIT benefit also to smaller enterprises which wish to be quoted on the Stock Exchange. It
provides for even stronger incentives with a reduced tax rate which can be as low as to 7%.
Art. 2, paragraph 1, letter a) of Legislative decree no.9 of 18th January 2000 provides that the
qualifying increases in the net equity are multiplied by 1.2 for the taxable period following that which
includes 30th September 1999, and by 1.4 for subsequent taxable periods. In each taxable period, however,
the increases in the equity capital, as adjusted by the above factors, cannot go as far as creating a sort of
“virtual” net worth, that is to say an amount exceeding the threshold of the total year-end equity capital of
the company which appears in the financial statements.
Moreover, this regime does not apply if the net equity of a quoted company at the end of the tax year
preceding the relevant tax year exceeds € 258,228,450 before taking in account the profits for the tax year.
The DIT incentives have been “frozen” at 30.06.2001; only those companies that had deliberated
qualifying increases in net equity before 30.06.2001 have continued to benefit from DIT incentives until
the introduction of the new Corporate Income Tax (IRES).
Substitute tax on income from alienation and contributions of businesses, mergers, de-mergers and
exchange of shares.
In 1997 an optional taxation regime of capital gains derived from corporate reorganizations, such as
alienation of businesses owned for at least three years, the alienation of qualified or associated
participations if the participations were classified as fixed financial assets at least in the last three balance
sheets, mergers and de-mergers. Such regime provided for the application of a substitute tax with a 27%
rate replacing both corporate and local income taxes. The regime gave the option to pay the tax due in up
to five equal annual instalments.
This tax was abolished in 2004.
The regional tax on production activities - IRAP
In Italy the most relevant tax mix change concerned the introduction of the so-called IRAP in 1998, a
regional tax on business activities paid by corporations and unincorporated entities which main
characteristics is a wide tax base and a relative low tax rate. IRAP represents the basic source of revenue
for the National Health System, nevertheless with its introduction other 6 taxes have been abolished, ILOR
among others.
IRAP is charged on the value of net production resulting from the business pursued within the region.
The rate of tax is set at 4.25 % for tax payers generally but may be increased by up to one percentage
point by individual regions.
44
The 2008 Budgetary Law has reduced the standard tax rate to 3.9% and in 2009 a deduction, from PIT
and CIT, of IRAP concerning interests and labour costs (that is a 10% quota of IRAP paid in the previous
year) has been introduced.
Furthermore, a reduced tax rate of 1,90% is charged on taxpayers operating in the agricultural sector and
on cooperatives of the fishing sector; various special IRAP regimes apply as well.
Law Decree 98/2011 later introduced increased tax rate for banks (4.65%), insurance companies
(5.90%) and concessionary companies outside the motorway sector (4.20%).
As regards in detail IRAP standard tax rates, the standard tax rate of 3,9% can be reduced or
augmented up to a maximum of 0,92%, plus an optional increase of 0,15% for the Regions with helth
budget deficit. As a result, the actual range for standartd tax rates is 2,98%- 4,97%
The following table confirms the widespread variation of IRAP standard tax rates applied among
Regions (tax rates in the table are updated to 2012):
Region
Standard tax rate
Abruzzo
4,60 %
Basilicata
3,90 %
Bolzano
2,98%
Calabria
4,97 %
Campania
4,97 %
Emilia Romagna
3,90 %
Friuli Venezia Giulia
3,90 %
Lazio
4,82%
Liguria
3,90%
Lombardia
3,90%
Marche
4,73%
Molise
4,97%
Piemonte
3,90 %
Puglia
4,82%
Sardegna
3,90%
45
Sicilia
4,82%
Toscana
3,90%
Trento
3,44%
Umbria
3,90%
Valle d’Aosta
2,98%
Veneto
3,90%
In addition to this, the Italian tax system provides a set of IRAP forfetary deductions concerning
dependent workers hired with an open-end contract, dependent workers hired in disadvantaged Regions
and taxpayers of minor dimensions1.
Law Decree 201/2011 raised all these deductions, and also introduced the possibility, for Regions, to
apply for a full deduction, from PIT and CIT tax liability, of IRAP concerning labour costs.
Later Law 208/2012 deferred the increases of IRAP deductions until 2014.
As a result, these are the IRAP deductions in force for 2012 and 2013:

dependent workers hired with an open-end contract: 4,600 euros, increased up to 10,600
euros for women an people under 35 years old

dependent workers hired with an open-end contract in a group of Regions (Abruzzo,
Basilicata, Calabria, Campania, Molise, Puglia, Sardegna e Sicilia): 9,200 euros, increased up
to 15,200 euros for women and people under 35 years old

deductions for taxpayers of minor dimensions:
Tax base (amount in euros)
IRAP deductions (amount in euros)
Up to 180,759.91
7,350
From 180,759.91 and up to 180,839.91
5,500
From 180,839.91 and up to 180,919.91
3,700
From 180,919.91 and up to 180,999.91
1,850
Starting from 2014, the IRAP deductions mentioned above will be augmented as follows:
1
There are some eceptions related to the Public Administration, banks, insurance companies and firms
operating in the financial sector, firms operating under the system of legal concession, etc,
46

dependent workers hired with an open-end contract: 7,500 euros, increased up to 13,500
euros for women an people under 35 years old

dependent workers hired with an open-end contract in a group of Regions (Abruzzo,
Basilicata, Calabria, Campania, Molise, Puglia, Sardegna e Sicilia): 15,000 euros, increased
up to 21,000 euros for women and people under 35 years old

deductions for taxpayers of minor dimensions:
Tax base (amount in euros)
IRAP deductions (amount in euros)
Up to 180,759.91
8,000
From 180,759.91 and up to 180,839.91
6,000
From 180,839.91 and up to 180,919.91
4,000
From 180,919.91 and up to 180,999.91
2,000
The new Corporate income tax - IRES
At the end of the year 2003 the IRPEG, together with the DIT incentives, was abolished. As of 1
January 2004 a new corporate income tax, IRES, was introduced with a statutory tax rate of 33%.
The 2008 Budgetary Law has cut the tax rate from 33% to 27.5%.
The 2004 reform of corporate taxation provides for a general system of capital gains exemption with
no deductibility of the corresponding capital losses. Starting from 2008, the exemption is granted on 95%,
of the total amount of capital gains.
Furthermore, the imputation method previously used to eliminate dividend double taxation has been
replaced with the exemption method (dividends are exempted for up to 95% for taxpayers subject to IRES
and up to 60% for taxpayers subject to IRPEF).
For taxpayers subject to IRPEF dividends arising from non-qualified participations are taxed
separately at a rate of 20%. Starting from 2008 dividends arising from qualified participations are exempt
for up to 50.28% (previously the exemption was 60%).
In the same year, 'thin capitalization' rules has been abolished as well as some depreciation allowances
and anticipated depreciation and new rules has been introduced in order to limit the deduction of interest
expenses:

full deduction of interest expenses up to the value of interest revenues;

possibility to deduct the interest expenses exceeding the amount of interest revenues up to 30%
of Gross Operating Profit;

possibility to increase with the unused portion of Gross Operating Profit of a given tax period,
the Gross Operating Profit of the subsequent tax periods (starting from 2010).
47
Starting from 2004 group consolidation for tax purpose has been introduced, both at the domestic
level and worldwide, on condition that the parent company controls at least 50% of the subsidiary. At
domestic level the option for tax consolidation is bilateral and can be exercised by some or all the
companies belonging to the group; the consolidated tax base is given by the algebraic sum of the taxable
incomes of the consolidated companies regardless of the percentage of shareholding held by the parent
company. The minimum period for tax consolidation is 3 years and the option can be renewed for a period
of the same length. The option for worldwide consolidation can be exercised only by the parent company
of the highest level and requires consolidation of all companies belonging to the group. The option cannot
be exercised if one of the subsidiaries is resident in a tax haven or benefits from a privileged tax regime.
The consolidated tax base is given by the algebraic sum of the percentage of taxable income of each
consolidated company corresponding to the shareholding held by the parent company. The minimum
period for tax consolidation is 5 years and the option can be renewed for a period of 3 years.
In addition, corporations participated by other corporations (each with a shareholding of at least 10%
and not higher than 50%) and limited liability companies with no more than 10 shareholders that are
natural persons can impute pro-quota their taxable income to the shareholders (the company is 'transparent'
for tax purposes).
The so-called ‘Robin tax’
An additional CIT rate of 5.5% was introduced during 2008 charged on oil, gas and electricity
industries in relation to extra profit generated from exceptional high oil prices. It is explicitly forbidden for
those firms to shift the tax on prices, under the surveillance of the Energy Authority.
Since 2009 the rate was increased to 6.5%.
Law Decree 138/2011 further increased the rate from 6.5% to 10.5% for the tax periods from 2011 to
2013. The Robin tax is now charged also on companies that produce electricity through the use of
renewable sources of energy.
The new Allowance for Corporate Equity (ACE) system of taxation
Starting from 1st January 2012, Italy introduced a variant on the Italian corporate income tax that is
the allowance for corporate equity (ACE) system of taxation, now applied to new injections of equity funds
in Italian enterprises (both in the form of money given by shareholders and as accumulated profits).
According to the new system, firms are allowed to deduct a notional return on their new injections of
equity, defined as the product of the amount of new equity funds (with reference to the equity stock at 31st
December 2010), with a notional interest rate that, according to Italian rules, is equal to 3% for the years
from 2011 to 2013 (after that term, the notional interest rate to be applied to the injections of new equity
will be determined each year by the Ministry of Economy and Finance).
II.1. LUXEMBOURG
The representative sub-central government corporate income tax rate is for Luxembourg City. The
rate is 0.03 (general rate) * 225 per cent (taux communal) = 6.75 per cent.
48
II.1. MEXICO
Corporate Income Tax Table for the years 1981 to 1986:
Taxable income
Lower Limit
(MXN)
0.01
2,000.01
3,500.01
5,000.01
8,000.01
11,000.01
14,000.01
20,000.01
26,000.01
32,000.01
38,000.01
50,000.01
62,000.01
74,000.01
86,000.01
100,000.01
150,000.01
200,000.01
300,000.01
400,000.01
500,000.01
Fixed Quota
Upper Limit
(MXN)
(MXN)
2,000.00
3,500.00
5,000.00
8,000.00
11,000.00
14,000.00
20,000.00
26,000.00
32,000.00
38,000.00
50,000.00
62,000.00
74,000.00
86,000.00
100,000.00
150,000.00
200,000.00
300,000.00
400,000.00
500,000.00
And over
75.00
165.00
375.00
615.00
885.00
1,485.00
2,145.00
2,925.00
3,885.00
6,045.00
8,325.00
10,725.00
13,305.00
16,455.00
28,505.00
41,885.00
71,525.00
105,525.00
210,000.00
Tax on the
amount in
excess of
lower limit (%)
Exent
5.00
6.00
7.00
8.00
9.00
10.00
11.00
13.00
16.00
18.00
19.00
20.00
21.50
22.50
24.10
26.76
29.64
34.00
38.00
42.00
In 2000 and 2001, all firms could defer 5 per cent of their corporate income tax on reinvested profits.
These profits were taxed at a 30 per cent rate; the deferred 5 per cent were paid when the profits were
distributed.
The corporate tax rate (30 per cent in 2013) is the same as the personal income tax rate on ordinary
income, as a result of the integration of the CIT and PIT in the Mexican fiscal system.
As from 2008, a minimum complementary tax to the income tax was introduced, the Business Flat
Rate Tax or IETU by its Spanish sigla (the taxpayer only pays the excess of the IETU over his/her income
tax). This tax substituted the Assets Tax and has a rate of 17.5%. The IETU taxes the income generated by
the transfer of goods, the rendering of independent services and the granting of temporary use or
enjoyment of goods, allowing the deduction of expenses corresponding to the purchase of goods,
independent services or the temporary use or enjoyment of goods used in those activities, and the
investments in fixed assets. Taxpayers’ can also obtain a credit for the taxed wages and salaries paid.
II.1. NETHERLANDS
Since 2000 the corporate tax rate has been gradually reduced from 35% to 25% in 2011. The basic tax
rate applies to taxable income over € 60.000 in 2007, € 275.000 in 2008 and € 200.000 from 2009. . To
taxable income below that limit a reduced rate of 20% applies.
II.1. NORWAY
The corporate tax rate (28 per cent) is the same as the personal income tax rate on ordinary income.
49
Any change in the rate will thus apply for both corporate and personal income tax.
II.1. POLAND
The payers of corporate income tax are taxed with flat rate tax. In recent years, the rate of this tax
base has been gradually reduced from 40% in 1996 to 30% in 2000 as well as to 19% in 2004. This 19 %
tax rate is still at present.
The corporate income tax encompasses all revenue of legal persons, organisational units without the
status of a legal person, with the exception of companies without the status of a legal person and tax capital
groups, excluding revenue from:

agricultural activity (except special sections of agricultural production),

forest economy.
The CIT Act exempts certain types of income from tax , e.g.:

income received by taxpayers from governments of foreign countries, international organizations
or international financial institutions etc.,

income from grants, subventions, subsidiary payments and other gratuitous performances received
to cover costs or to refund expenses incurred in connection with receipt,

direct payments applied within the Common Agricultural Policy of the European Union,

income of taxpayers (not apply to State enterprises, cooperatives and companies) whose statutory
aim is: scientific activity, technical research, supporting public projects in building roads and
telecommunication networks and water supply system in rural areas, charity, health protection and
social aid, religious practice – in the part designed for such purposes,

income of churches legal persons or incomes of companies whose sole shareholders is a church
legal person designed for the religious, charity, educational and on activities,

income from school activity – in part designed for schools’ purpose.
The corporate income tax is the central government tax but revenue from this tax is split between
central government and local governments.
II.1. SWITZERLAND
In Switzerland, companies pay a tax on capital and a tax on profit. However, because the data in this
table are limited to corporate income tax rates, effective tax rates for companies are computed here without
factoring in the tax on capital. Calculation of the effective income tax rate therefore disregards the fact that
the rate of tax on capital is deductible from the income tax. The nominal corporate tax rate (t c) is the sum of
the nominal federal tax rate (tcf) and the cantonal (or regional) rate (tcr). The overall effective tax rate taking
deductions into account (t’) is computed as follows: t’c= (tcf +tcr)/(1+tcf+tcr) = tc/(1+tc). The effective federal
profit tax rate is thus t’cf = tcf(1-t’)= tcf/(1+tc). The effective regional profit tax rate is: t’cr= tcr(1t’)=tcr/(1+tc). The quantity tcr is computed by multiplying the base rate by M: tcr = base rate *M. The
variable M is the sum of cantonal, communal and church multiples. In the case of companies, church taxes
are included as businesses cannot avoid them. Information on rates excluding church taxes are included as
comments in the table itself.
II.1. UNITED STATES
The federal income tax rate of 35 per cent generally applies to taxable income over $10 million.
50
The representative sub-central rate is a weighted average state corporate marginal income tax rates. It
was calculated based on the methodology provided in King, Mervyn and Don Fullerton, eds., The Taxation
of Income from Capital, Chicago: University of Chicago Press, 1984, p. 204. The weighted average rate is
the sum for all states of the top corporate income tax rate for each state multiplied by the state’s share in
personal income.
Beginning in 2005 taxpayers are permitted a deduction for a portion of income from US production
activities, which is phased in over six years. Beginning in 2010, the deduction is nine percent (three
percent for 2005 and 2006 and six percent for 2007, 2008 and 2009) of the lesser of (1) qualified
production activities, or (2) taxable income. The deduction is limited to 50 percent of wages paid by the
employer.
Part II, Table 2
II.2. AUSTRALIA
Pooled Development Funds (PDF)
Concessional taxation treatment is available to investment companies that are established and
registered as Pooled Development Funds (PDFs). Income arising from investments in small-medium
enterprises is taxed at 15 per cent and other income is taxed at 25 per cent. The PDF was closed to new
registration from 21 June 2007. Although the PDF program has been replaced by an ‘early stage venture
capital partnership’ (ESVCLP) investment vehicle, the program continues to operate for PDFs that were
registered at the closure date of the program.
II.2. BELGIUM
Small business income
Small business corporate tax rates
income
marginal
year
rate
marginal
threshold
rate
marginal
threshold
rate
threshold
1977
33.00
not available
bef
1978
33.00
not available
bef
1979
33.00
not available
bef
1980
33.00
not available
bef
1981
33.00
not available
bef
1982
33.00
1 000 000
1983
31.00
1 000 000
1984
31.00
1985
1986
3 600 000
40.00
14 400 000
bef
14 400 000
bef
3 600 000
47.50
1 000 000
3 600 000
not available
bef
31.00
1 000 000
3 600 000
not available
bef
31.00
1 000 000
3 600 000
not available
bef
1987
30.00
1 000 000
3 600 000
not available
bef
1988
30.00
1 000 000
3 600 000
not available
bef
1989
30.00
1 000 000
3 600 000
not available
1990
29.00
1 000 000
37.00
3 600 000
43.00
14 800 000
bef
1991
28.00
1 000 000
36.00
3 600 000
41.00
13 000 000
bef
1992
28.00
1 000 000
36.00
3 600 000
41.00
13 000 000
bef
bef
51
1993
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1994
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1995
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1996
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1997
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1998
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
1999
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
2000
28.84 (28.0)
1 000 000
37.08 (36)
3 600 000
42.23 (41)
13 000 000
bef
2001
28.84 (28.0)
25 000
37.08 (36)
89 500
42.23 (41)
323 750
euro
2002
28.84 (28.0)
25 000
37.08 (36)
89 500
42.23 (41)
323 750
euro
2003
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
euro
2004
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
euro
2005
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
euro
2006
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
euro
2007
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2008
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2009
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2010
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2011
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2012
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
2013
24.98 (24.25)
25 000
31.93 (31)
90 000
35.535 (34.5)
322 500
Euro
Reduced rates can be applied when the taxable profit does not exceed a threshold.
Threshold starting from income year 2003: 322 500 euro.
Taxable net profit in euros
0 – 25 000
25 000 – 90 000
90 000 – 322 500
322 500 and over
Rate applicable to this bracket
24.25%
31%
34.50%
33%
Rate applicable including 3% surtax
24.9775%
31.93%
35.535%
33.99%
The lower the return on equity before tax, the lower the effective tax rate due to the allowance for
corporate equity (ACE). The following table illustrates the impact of the ACE on the effective tax rate
when the gross return on equity equals respectively 2, 3 or 4 times the notional interest rate and assuming
that SMEs that qualify for reduced rates also qualify for the increased ACE-rate (3.942% in 2006, 4.281%
in 2007, 4.807% in 2008, 4.973% in 2009, 4.3% in 2010, and 3.925% in 2011, 3.5% in 2012 and 3.242%
in 2013).
52
SMEs 2011
without ACE
gROE = 2 ACErate
gROE = 3 ACE-rate
gROE = 4 ACE-rate
Gross return on equity (gROE)
6.484
6.484
9.726
12.968
gROE / ACE-rate
ACE-rate 2011
Taxbase
Nominal CIT rate
CIT
Net profit
Effective CIT rate
2
0
6.484
2
3,242
3,242
3
3,242
6.484
4
3,242
9.726
33.99%
2,204
4.280
33.99%
1,102
5.382
33.99%
2,204
7.522
33.99%
3.306
9.662
33.99%
16.995%
22.66%
25.493%
Threshold for 2002 and 2001: 323 750 euro.
Taxable net profit
0 – 25 000
25 000 – 89 500
89 500 – 323 750
323 750 and over
Rate applicable to this bracket
28%
36%
41%
39%
Rate applicable including 3% surtax
28.84%
37.08%
42.23%
40.17%
In order to qualify for these reduced rates, a company must fulfil a number of conditions.

The company must not be an investment company and must not be part of a group to which
belongs a co-ordination centre;

Entitlement to the reduced rates is not granted to companies of which at least 50% of the shares
are held by one or more other companies;

At least one of the managers is granted a remuneration which, if it is less than a certain threshold,
shall not be less than the company’s taxable income. The threshold increased from +/- 24 500
euros (until 2003), to 36 000 (starting from income year 2007);
Threshold
2000
2001
2002
2003
2004
2005
2006
In euros
24 789.35
24 500
24 500
24 500
27 000
30 000
33 000

As from
2007
36 000
Except for certain recognized co-operative companies, entitlement to the reduced rates is also
denied when the dividend payments exceeds 13% of equity capital effectively paid up at the
beginning of the tax period.
In order to qualify for the increased ACE-rate, the number of employees must be lower than 100
(annual average) and not more than one of the following caps may be exceeded in both the last and the last
but one approved accounting periods:

The number of employees must be lower than 50 (annual work force average);

The turnover must be lower than 7.3 million euro (VAT excluded);
53

The balance sheet total must be lower than 3.65 million euro.
II.2. CANADA
Small business income
Before 1982, the small business income tax rate applied to the first $150,000 of active business
income of small Canadian-controlled private companies at the federal level.. This threshold was raised to
$200,000 in 1982, to $225,000 in 2003, to $250,000 in 2004, to $300,000 in 2005 to $400,000 in 2007 and
to $500,000 as of January 1, 2009.
Most provinces provide reduced corporate income tax rates for small businesses. See note to Table
II.3 for a summary of provincial corporate income tax rates on small business income.
The representative sub-central government small business tax rate is an average of provincial
corporate income tax rates, weighted by the provincial distribution of the federal corporate taxable income
taxed at the small business rate.
Manufacturing and processing income
Before 2004, corporate income on manufacturing and processing (M&P) activities, not otherwise
eligible for the small business rate reduction, was taxed at a lower rate at the federal level. This tax rate
differential was completely phased-out between 2000 and 2004 with the general corporate income tax rate
being reduced at the M&P rate level.
Several provinces provide reduced corporate income tax rates on M&P income. See note to Table II.3
for a summary of provincial corporate income tax rates on M&P income.
II.2. CHILE
Income tax on state-owned enterprises
State owned enterprises have to pay a surtax rate of 40% in addition to the basic rate of FCT.
The specific tax on mining activities
The specific tax on mining activities was introduced in 2006 (and modified in 2010) and is levied on
income derived from the operational income of metal mining activity when obtained by a mining exploiter.
Mining exploiters are defined as individuals or legal entities that extract mineral substances and sell them
in any state of production.
The tax is payable by those having annual sales that exceed the equivalent of the value of 12,000
metric tons of fine copper. If annual sales have an equivalent value of between 12,000 and 50,000 metric
tons, the tax is paid at a progressive rate that varies between 0.5% and 4.5%.Where the annual sales are
greater than the equivalent of 50,000 metric tons, and the mining operational margin obtained by the
mining exploiter is equal or lower than 85, the progressive tax rate ranges from 5% to 34.5%; if the margin
is greater than 85, the tax rate applicable is 14%.,
The value of a metric ton of fine copper is calculated according to the average value at the London
Metal Exchange. Certain amounts are either added or deducted from the FCT base to calculate the
operational income for mining activity.
54
Small businesses
Small businesses do not have targeted income corporate taxes. However they can benefit from some
special income tax regimes, where the general methodology to calculate the taxable income is modified,
and some tax obligations are simplified or eliminated.
II.2. CZECH REPUBLIC
There are the following special activity-dependent income tax rates :
pension funds
shares fund
investment funds
2000
25 %
25 %
25 %
2001-2003
15 %
15 %
15 %
2004
15 %
5%
5%
2005-2011
5%
5%
5%
II.2. HUNGARY
In the case of a so-called party carrying out activities abroad - defined in the Act 81 of 1996 on
Corporate Tax and Dividend Tax - the corporate tax rate was 3 per cent in the period 2000-2003 and was 4
per cent in the period 2004-2005. This regime has been ceased since 2006.
II.2. ISRAEL
The Law for the Encouragement of Capital Investments was amended as of 1/1/2011.
For the purposes of the law the country is divided into two areas: A Priority Area (far from the
Center) and The Center of the country .
To qualify for any benefits the company has to be an industrial company registered in Israel and has
to prove export capability.
Companies that qualify will be entitled to a lower company tax rates and, if located in the Priority
Area, will also be entitled to an investment grant which will be calculated as a percentage of their approved
investment as indicated below.
Company Tax rates
Center of the Country
Priority Area
Years: 2011 & 2012
15%
10%
Years: 2013 & 201
12.5%
7%
2015 onwards
12%
6%
Dividend Tax rate
15%
15%
Investment Grant
---
20%
55
Super low company tax rate: Companies that meet the following criteria will be taxed at an even
lower tax rate: 8% in the center and 5% in the Priority area.
Criteria:
1.
Total annual income in Israel of at least 1.5 billion LIS
2.
The combined balance sheet of the company is at least 20 billion LIS.
3.
The business plan of the company will include one of the following:
a)
Investment in productive equipment of at least 800 million LIS in the center of the country or
400 million LIS in the Priority Area over a 3 year period.
b)
Investment in R&D of at least 150 million NIS in the center of the country or 100 million LIS in
the Priority Area
c)
Employing at least 500 employees in the center of the country or 250 employees in the Priority
Area
II.2. ITALY
Targeted corporate income tax refer to the DIT and the withholding taxes on corporate
reorganizations as described in the explanatory notes of table II.1.
II.2. MEXICO
Special Tax Treatment by Sector and Targeted Activities 2000 – 2013
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Reduction in income tax for non exempt
Tax reduction for book
income from agricultural activities, cattle
publishers, individuals and
raising, forestry or fishing (corporations)1/
corporations
Applicable rate (%)
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
40.0%
46.7%
30.0%
44.8%
20.0%
32.1%
10.0%
32.1%
N.A.
32.1%
N.A.
30.0%
N.A.
30.0%
N.A.
30.0%
N.A.
30.0%
N.A.
Notes: N.A. not applicable indicating that this disposition did not exist in the corresponding year,
1/In 2000 and 2001 the general reduction was 50%, and it was 25% if taxpayers industrialized their products.
Source: Mexican Income Tax Law, 2000 to 2013.
56
II.2. NETHERLANDS
In 2000 a reduced rate was introduced for small and medium enterprises. In 2000-2006 the reduced
rate applies to the first EUR 22 689 (NLG 50 000 in 2001 and 2000) of taxable corporate income. In 2007
an additional bracket was introduced. For that year, a reduced rate of 20% was levied on the first EUR 25
000 of taxable income. Between EUR 25 000 and EUR 60 000 of taxable income, the applicable rate was
23.5%. For the tax year 2008 new tax rates and threshold were set at 20% on the first € 275.000 of taxable
income. This threshold was lowered in 2009 to € 200.000. The following tables show the thresholds and
statutory rates from 2006 to present:
The following tables show the thresholds and statutory rates from 2006 to 2010:
2006
2007
threshold
statutory rate
threshold
statutory rate
0 – 22689
22689 - over
25,5%
29,6%
0 – 25000
25000 – 60000
60000 – over
20%
23,5%
25,5%
threshold
statutory rate
threshold
0 – 275000
275000 – over
20,0%
29,6%
0 – 200000
20%
200000 – over
25,5%
2008
2009 - 2010
statutory rate
2011 - present
threshold
statutory rate
0 – 200000
200000 – over
20,0%
25,0%
II.2. NORWAY
Norway has special tax regime for the shipping industry. There is a zero rate corporate tax on earnings
from shipping activities (a tax on net tonnage applies). When earnings are distributed to individuals, the
normal 28 per cent personal dividend tax rate applies (dividends paid to corporations are tax exempt in
Norway). The resource rent from hydroelectric power production and petroleum exploitation is subject to
an extra resource rent tax in addition to the normal 28 per cent corporate tax rate. The resource rent tax rate
is 30 per cent for hydroelectric production and 50 per cent for petroleum production, for profits above a
certain level.
II.2. PORTUGAL
Since the 1988 direct taxation reform, the general corporate tax rate has been gradually reduced from
36,5% to 25%. From 2009 onwards, two general tax rates are applied at a Central Government Level. A
57
general tax rate of 12,5% will be applied for the first € 12500 of taxable income and a 25% tax rate will be
applied for the remaining amount of taxable income (when the total taxable income exceeds € 12500).
From 2001 to 2010, small companies with annual revenues not exceeding € 149.639,37 are subject to
an optional simplified tax regime based on coefficients fixed by law, with a minimum taxable income
equivalent to the annual national minimum wage, and the resulting taxable income is taxed at a rate of 20%
(those who so desire can opt for being subject to the general tax rules).
From 1999 to 2001, a reduced corporate tax rate of 20 per cent applied to small businesses with an
average gross income in 1997 and 1998 (or, in the case of businesses created after 1st January of 1999, a
gross income in the first year) lower or equal to € 149.639,37.
Until 2011 there was also a reduced corporate income tax rate of 15% which applies to companies
located in less developed areas (10% for the first five years if it is a start-up). There are also reduced tax
rates which apply to companies located in the Autonomous Region of the Azores..
From 2012 onwards there’s only one general tax rate of 25% (excluding AR Azores).
II.2. SLOVAK REPUBLIC
In 1994 - 2003, a special tax regime applied to taxpayers whose revenue from agricultural production
was more than 50% of their total revenue. From 1994 to 1999 the tax rate was reduced to the half of the
statutory tax rate. From 2000 to 2003, the tax rate was 15%.
Moreover, in 1994 – 1999, if at least 60% (50% from 1997) of all employees were severely disabled
(minimum 20 persons), the statutory corporate tax rate was reduced by 50%. From 2000 to 2003, the tax
rate was 18%.
Since 2004, no special tax rates have been applied in Slovakia.
II.2. SPAIN
Since 2008 as a general rule, corporate tax rate is set up at 30 per cent of the taxable income (32.5 per
cent during 2007). Nevertheless, some other special corporate tax rates apply:
35 per cent in 2008 (37.5 per cent in 2007): to companies whose main activity consists of the
exploration, investigation and exploitation of hydrocarbons deposits.
25 per cent: to the following incorporated companies:

Mutual Insurance Companies.

Mutual Guarantee Societies.

Credit Cooperative Societies, Rural Savings Banks.

Professional and Enterprise Associations, Trade Unions and Political Parties.

Foundations and other non-profit Organisations.

Cooperative Federations
58
20 per cent: to tax-privileged Cooperative Societies.
10 per cent: to certain non-profit institutions.
1 per cent: to UCITS
0 per cent: to Pension Funds
Small and Medium Incorporated Business.
From 2011, it is raised both the annual turnover (up to € 10 million), and the tax base threshold (up to
€ 300,000), to which the reduced CIT rate of 25% is applied. The remaining taxable income is taxed at
30%. Furthermore, those SME’s with a turnover below € 5 million, and an average payroll lower than 25
employees are eligible for a reduced tax rate of 20%, , and the remaining taxable income is subjet to a 25%
tax rate.
SME (annual turnover not exceeding € 8 million have, for tax periods starting from January 1 st 2007
onwards a reduced rate of 25%, applied up to a taxable income of € 120 202,41. Profits over the prior
amount were taxed at 30% since January 1st 2007. Said that, CIT rate for small companies that maintain or
increase their workforce has been temporarily decreased by 5 percentage points (20%) for the years 20092011
Until January 2005, up to a taxable income of € 120 202,41: 30 per cent. In 2002-2004 the taxable
income amount threshold was € 90 151,82 and Pta 15 mill. in 2000-2001.
Rest of the taxable income: 35 per cent.
II.2. UNITED KINGDOM
The main corporate tax rate of 23 per cent is for companies with profits over £1.5 million.
Lower rates apply to lower profits:

All companies with profits up to £300 000 pay at the small profits rate of 20 per cent. Those with
profits between £300 001 and £1.5 million pay at 20 per cent on the first £300 000 and at 23.75
per cent on the remainder so that by £1.5 million they pay at an average rate of 23 per cent.

Where a company is in a group or associated with other companies by virtue of ownership or
control the thresholds are divided by the total number of connected companies.

There were some differences for earlier years: For 2012-13, all companies with profits up to
£300,000 paid at the small profits rate of 20 per cent on the first £300,000 and at 25 per cent on
the remainder so that by £1.5 million they paid at an average rate of 24 per cent.

For 2011-12, all companies with profits up to £300,000 paid at the small profits rate of 20 per
cent on the first £300,000 and at 27.5 per cent on the remainder so that by £1.5 million they paid
at an average rate of 26 per cent.

For 2008-09, 2009-10 and 2010-11, all companies with profits up to £300 000 paid at the small
companies rate of 21 per cent. Those with profits between £300 001 and £1.5 million paid at 21
per cent on the first £300 000 and at 29.75 per cent on the remainder so that by £1.5 million they
paid at an average rate of 28 per cent.For 2007-08, all companies with profits up to £300 000 paid
59
at the small companies rate of 20 per cent. Those with profits between £300 001 and £1.5 million
paid at 20 per cent on the first £300 000 and at 32.5 per cent on the remainder so that by £1.5
million they paid at an average rate of 30 per cent.

For 2006-07, all companies with profits up to £300 000 paid at the small companies rate of 19 per
cent. Those with profits between £300 001 and £1.5 million paid at 19 per cent on the first £300
000 and at 32.75 per cent on the remainder so that by £1.5 million they paid at an average rate of
30 per cent.

Between 2002-03 and 2005-06 , companies with profits of £10 000 or less paid no tax (they were
paying at the rate of 10 per cent in 2000-01 and 2001-02 ). Those with profits of between £10 001
and £50 000 paid nothing on the first £10 000 and at 23.75 per cent on the remainder, so that by
the upper limit they are paying at an average rate of 19 per cent. In 2000-01 and 2001-02, those
with profits of between £10 001 and £50 000 paid at 10 per cent on the first £10 000 and at 22.5
per cent on the remainder, so that by the upper limit they were paying at an average rate of 20
per cent. This was subject to a minimum rate of 19 per cent on all distributed profits in 2004-05
and 2005-06.

Between 2002-03 and 2005-06, companies with profits between £50 001 and £300 000 paid at
the small companies’ rate of 19 per cent (20 per cent in 2000-01 and 2001-02).

For 2000-01 and 2001-02, all companies with profits between £300,001 and £1.5 million paid at
20 per cent on the first £300,000 and at 32.50 per cent on the remainder so that by £1.5 million
they paid at an average rate of 30 per cent.

Between 1981-82 and 1999-2000 the situation was simpler as there was no starting rate; there
was only a small companies’ rate and a main rate. The small companies’ rate has dropped
monotonically from 40 per cent in 1981-82 to 20 per cent in 1999-2000. Likewise the main rate
has been lowered from 52 per cent in 1981-82 to 30 per cent in 1999-2000. The small companies’
rate applied up to £90,000 in 1981-82 but had reached a limit of £300,000 by 1999-2000. The
main rate applied from £225,000 in 1981-82. By 1999-2000 the main rate applied from £1.5
million. Tax was charged between the two limits for a specific tax year in a fashion similar to that
described in the first bullet above.
II.2. UNITED STATES
The federal income tax rate of 15 per cent applies to taxable income under $50,000; 25 per cent
applies to taxable income over $50,000 and under $75,000; 34 per cent applies to taxable income over
$75,000 and under $10 million; and 35 per cent applies to taxable income of $10 million or more. The
benefit of lower rates is recaptured for taxable incomes between $100,000 and $18,333,333.
The representative sub-central rate is a weighted average state marginal income tax rate. It was
calculated by summing for all states the lowest corporate income tax rate (or the flat rate) in each state
weighted by the state’s share in personal income.
Beginning in 2005 taxpayers are permitted a deduction for a portion of income from US production
activities, which is phased in over six years. Beginning in 2010, the deduction is nine per cent (three per
cent for 2005 and 2006 and six per cent for 2007, 2008 and 2009) of the lesser of (1) qualified production
activities, or (2) taxable income. The deduction is limited to 50 per cent of wages paid by the employer.
60
Part II, Table 3
II.3. CANADA
The representative sub-central government tax rate is an average of provincial corporate income tax
rates, weighted by the provincial distribution of the federal corporate taxable income.
The provincial tax base for most Canadian provinces is identical to the federal tax base. Provinces
that administer their own corporate tax systems (Quebec and Alberta) are permitted to set their own base.
However, for the most part, the differences between the federal and the provincial base are not significant.
Provincial corporate income tax rates as of December 31 of each year:
General Statutory Corporate Income Tax Rates
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut
2006
14.0
16.0
16.0
13.0
9.9
14.0
14.5
14.0
10.0
12.0
15.0
11.5
12.0
2007
14.0
16.0
16.0
13.0
9.9
14.0
14.0
13.0
10.0
12.0
15.0
11.5
12.0
2008
14.0
16.0
16.0
13.0
11.4
14.0
13.0
12.0
10.0
11.0
15.0
11.5
12.0
2009
14.0
16.0
16.0
12.0
11.9
14.0
12.0
12.0
10.0
11.0
15.0
11.5
12.0
2010
14.0
16.0
16.0
11.0
11.9
12.0
12.0
12.0
10.0
10.5
15.0
11.5
12.0
2011
14.0
16.0
16.0
10.0
11.9
11.5
12.0
12.0
10.0
10.0
15.0
11.5
12.0
2012
14.0
16.0
16.0
10.0
11.9
11.5*
12.0
12.0
10.0
10.0
15.0
11.5
12.0
* The Government of Ontario proposed in its 2012 budget that legislated general corporate income tax rate cuts not be implemented
and that the rate be frozen at 11.5% until the deficit is eliminated.
M&P Statutory Corporate Income Tax Rates
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut
2006
5.0
16.0
16.0
13.0
9.9
12.0
14.5
10.0
10.0
12.0
2.5
11.5
12.0
2007
5.0
16.0
16.0
13.0
9.9
12.0
14.0
10.0
10.0
12.0
2.5
11.5
12.0
2008
5.0
16.0
16.0
13.0
11.4
12.0
13.0
10.0
10.0
11.0
2.5
11.5
12.0
2009
5.0
16.0
16.0
12.0
11.9
12.0
12.0
10.0
10.0
11.0
2.5
11.5
12.0
2010
5.0
16.0
16.0
11.0
11.9
10.0
12.0
10.0
10.0
10.5
2.5
11.5
12.0
2011
5.0
16.0
16.0
10.0
11.9
10.0
12.0
10.0
10.0
10.0
2.5
11.5
12.0
61
Small Business Statutory Corporate Income Tax Rates
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut
2006
5.0
5.4
5.0
1.5
8.0
5.5
4.5
5.0
3.0
4.5
4.0
4.0
4.0
2007
5.0
4.3
5.0
5.0
8.0
5.5
3.0
4.5
3.0
4.5
4.0
4.0
4.0
2008
5.0
3.2
5.0
5.0
8.0
5.5
2.0
4.5
3.0
2.5
4.0
4.0
4.0
2009
5.0
2.1
5.0
5.0
8.0
5.5
1.0
4.5
3.0
2.5
4.0
4.0
4.0
2010
4.0
1.0
5.0
5.0
8.0
4.5
0.0
4.5
3.0
2.5
4.0
4.0
4.0
2011
4.0
1.0
4.5
5.0
8.0
4.5
0.0
2.0
3.0
2.5
4.0
4.0
4.0
II.3. GERMANY
The representative sub-central government corporate income tax rate is for Berlin. In the years
between 2000 and 2007 the rate was 0.05 (general rate) * 410 per cent (local “Hebesatz”) = 20.5 per cent.
As the local business tax was deductible from its own base, the effective rate was 20.5 / 120.5 = 17 per
cent. With the Corporate Tax Reform in 2008 the representative sub-central government corporate income
tax rate was changed to 14.35 per cent (0.035 general rate * 410 per cent “Hebesatz”). The local business
tax is no longer deductible from its own base.
II.3. LUXEMBOURG
The representative sub-central government corporate income tax rate is for Luxembourg City. The
rate is 0.03 (general rate) * 225 per cent (taux communal) = 6.75 per cent.
II.3. KOREA
A uniform sub-central government tax rate of 10 per cent is used as a representative rate. The local
government can adjust the rate between a lower limit of 5 per cent and an upper limit of 15 per cent.
However, in practice all use the 10 per cent rate.
II.3. NORWAY
From 2005 revenue-sharing between the central and local government of income tax from
corporations was reintroduced (a similar system was abolished in 1999). Under this revenue-sharing
arrangement, revenue equal to 4.25 percentage points of the overall corporate tax rate of 28 per cent are
allocated to a sub-central government tax fund and distributed to local governments based on certain
criteria (mainly based on the local share of employment). The rest (23.75 percentage points) is allocated to
the central government. As from 2007, the corporate revenue-sharing between the central and local
government was again abolished.
II.3. PORTUGAL
As from 2007, local authorities may levy a non deductible surcharge of up to 1.5 % of the taxable
62
profit before the deduction of tax losses and tax benefits. In previous years, the corporate income tax
liability could be increased by a local surcharge, up to a limit of 10 per cent of the central government tax
gross of tax credits.
II.3. SWITZERLAND
The representative sub-central adjusted rate: City of Zurich in the canton of Zurich corresponds to the
calculation made in Table I.5. A church tax at the cantonal level is also applicable. Corporate taxes paid are
deductible from their own bases and from the central, sub-central and local tax bases.
Minimum sub-central adjusted rate: Canton of Lucerne. Maximum sub-central rate: Canton of
Geneva.
Cf also explanatory note to Table II.1 for Switzerland. For companies the church taxes are included,
as business cannot avoid them. Information on the rates excluding the church tax is provided as comments
in the table itself.
II.3. UNITED STATES
The representative sub-central rate is a weighted average state corporate income tax rate. See the
explanatory notes to table II.1. Seven states (and many localities) do not impose corporate income tax. The
maximum sub-central rate applies to Philadelphia, Pennsylvania.
General note to Part II, Table 4
This table reports on the tax treatment of domestic dividend income by showing the effective tax rates
on distribution of domestic source of income to a resident individual shareholder.
The pre-tax distributed profit (gross profits), shown in column 3, is income before corporate tax that a
corporate firm must earn to pay out 100 in dividend. For example, a pre-tax distributed profit of 125 with a
corporate tax rate of 20 per cent suffices to distribute a dividend of 100. The pre-tax distributed profits is
equal to 100 / (1-X), where X is the corporate income tax rate on distributed profits.
The distributed profits (dividend), shown in column 4, is the amount of profits, net of corporate taxes,
distributed by the corporate firm to its shareholders.
The grossed-up dividend (column 7) is the taxable amount of dividend for personal income tax
purposes. For example when a company pays out a dividend of 100 and the shareholder is required to
gross-up his dividend with a tax credit of 40, the base for the personal income tax becomes 140. Given a 40
per cent marginal tax rate the personal income tax becomes 56 (0.4*140), from which the imputation tax
credit of 40 can be deducted, yielding a final individual income tax of 16.
Dividends can conform to one of a number of possible tax treatments:
A classical system treats corporations and investors as separated entities, taxing profits first at the
corporate level, and then taxing after-corporate tax profits again at the shareholder level when that income
is distributed to them as a dividend. A modified classical system implies that dividend income is taxed at
lower rates than other forms for capital income at the shareholder level.
An imputation system is a system under which part or all of the corporate income tax paid by a
company on its profits is credited against the personal income tax liability of the shareholders in receipt of
63
dividends. The imputation reduces or eliminates the double taxation of distributed profits which arises
under the classical system of taxation.
Many countries have adopted an imputation system in one form or another. The system may be a "full
imputation system" where the shareholder is entitled to full credit for corporate income tax paid, or it may
be a "partial imputation credit" where the shareholder is only granted a partial credit for corporate income
tax paid.
A partial inclusion system implies that only a fraction of the dividend income is included as taxable
income at the personal level. Several OECD countries have recently introduced such a system, in some
countries replacing an imputation system and in others replacing some sort of a classical system. Partial
inclusion is in practice similar to a modified classical system, but where there is a reduction in taxable
income instead of a reduction in the tax rate for dividend income.
An exemption system (no shareholder taxation) implies that if gross profits of 166.67 are subject to
a 40 per cent corporate tax rate, a net dividend of 100 is distributed to the shareholder, which is exempt
from personal income tax.
A split-rate system is a system of corporate income tax under which different rates of corporate
income tax are levied on retained and distributed profits (without applying the imputation system). A
preferential treatment is generally granted to distributed profits in the form of a lower rate of tax, the
rational being that distributed profits will be subject to additional tax in the hands of the shareholders. The
purpose of a split-rate system is to reduce the double taxation of dividends. Germany is the only OECD
country that has had this system, but it was abolished in 2001.
Part II, Table 4
II.4. AUSTRIA
Dividends received by a resident individual from a resident company are subject to a final
withholding tax at a rate of 25 per cent.
II.4. BELGIUM
Up till 2011 the withholding tax was final if the shareholder so chose (and most shareholders did).The
standard withholding and personal income tax rate was 25% although a reduced rate of 15% applied to
Belgian shares issued after 1 January 1994.
In 2012, the tax treatment of dividend income differed according to several factors:

the withholding tax paid at source. At source, the withholding tax rate was 25% for “old” shares
and 21% for Belgian shares issued after 1/1/1994. In the latter case however, the investor could
opt to pay an extra 4% at source.
In the PIT return the taxpayer had to declare (upon honour) whether the annual threshold (EUR
20020) for qualifying interest and dividend income was exceeded or not. Not all dividend and interest
income was taken into consideration, among the disregarded items were interest from ordinary saving
accounts, as well as dividend and interest income for which the extra 4% had been paid at source.
When 25% or 21%+4% was paid at source, the withholding tax was final if the shareholder so chose.
When only 21% was paid at source, inclusion in PIT return was mandatory or optional depending whether
the annual threshold was exceeded or not. When the income was included in the PIT-return, the tax
64
administration selected the most beneficial treatment for the taxpayer: distinct taxation at the same rate as
the withholding tax rate (21%, 21%+4% or 25%) or aggregation with other sources of income.
In 2013 this complex system was abolished and replaced by a single withholding tax rate of 25% for all
dividends. This withholding tax is final if the shareholder so chooses.
The lower the return on equity before tax, the lower the effective CIT rate due to the allowance for
corporate equity (ACE). E.g. the effective tax rate is only half the nominal tax rate when the return on
equity before tax (gROE) is twice the notional interest rate (2.742% in 2013, 3.242% for small and
medium enterprises).
non-SMEs 2013
without ACE
gROE / ACE-rate
2
ACE-rate 2013
Gross return on equity (gROE)
Type of dividend treatment
0
5.484
CL
gROE =
2 ACE-rate
2
2.742
gROE =
3 ACE-rate
3
2.742
gROE =
4 ACE-rate
4
2.742
5.484
8.226
10.968
CL
CL
CL
CIT rate on distributed profits
34.0
17.0
22.7
25.5
Pre-tax distributed profits
151.5
120.5
129.3
134.2
100
100
100
100
25
25
25
25
25
25
25
25
Overall PIT + CIT rate
50,5
37,7
42,0
44,1
CIT/PIT+CIT
67,3
45,0
54,0
57,8
PIT/PIT+CIT
32,7
55,0
46,0
42,2
Distributed profits
Final withholding tax
PIT rate on (grossed-up) dividend
Grossed up dividend
Imputation rate
Imputation / dividend tax credit
Net personal tax
II.4. CANADA
In column 6, the applied sub-central rate corresponds to the representative sub-central government tax
rate as reported on table I.7.
The dividend credit rate reported reflects the federal dividend tax credit of 15.0198 per cent and the
provincial dividend tax credit. Effective provincial dividend tax credits vary by province. For the
representative city case, Ontario’s effective dividend tax credit rate is 9.98 per cent (6.4 per cent plus
impact of surtax).
II.4. CHILE
Intercompany dividends and profits distributed between domiciled companies are not liable to the
First Category tax because the tax has already been paid on those profits by the company making the
distribution.
II.4. FINLAND
70% of dividends from listed companies are included in taxable capital income.
65
For non-listed companies part of the dividends may be taxed as earned income. Dividends from nonlisted companies are not taxed at the hands of the shareholders if the dividend does not exceed the 9 %
annual return on the net wealth. If this 9% yield is higher than the maximum amount of € 60,000, 70% of
the exceeding amount is taxed as capital income and 30 % is tax-exempt income. Capital income tax rate is
30 % up to EUR 50 000, and the exceeding amount is taxed at the rate of 32 %. Of the distributed
dividends in excess of the annual return of 9%, 70% is regarded as taxable earned income and 30% as taxexempt income for shareholders.
II.4 FRANCE
The rates in Table II.4 and the following explanations are related to the situation in force in January
1st of the year of the income (the personal income taxation is usually one year later). The dividends are
subject to:

CIT at a rate of 34.43 % (cf. II-1);

Additional contribution on distributed profit (3 %);

Social contributions (particularly CSG and CRDS) of 15.5%;

Exceptional contribution on high incomes (top rate of 4% when total income is over 500 000 for
single persons and 1 000 000 € for couples).

Personal income tax: top PIT rate of 45% with a 40 % allowance on dividends to temper the
double taxation (CIT and PIT). The tax base is further reduced by a part of the social
contributions already paid (5.1 % of the gross dividends).
Between 2008 and 2012, the taxpayer could choose between the progressive income tax schedule and
a final withholding tax (created in 2008). It was rational for a high income tax payer to choose the final
withholding tax.
From January 1st 2013, distributed dividends become liable to progressive income tax schedule.
Besides, a mandatory creditable withholding tax of 21% is applied on these revenues.
The other main changes in the taxation of the dividends between 2008 and 2013 were :

top PIT rate was 40% in 2008 and 2009, 41% from 2010 and 45% from 2012 ;

the final withholding tax rate was 18% from 2008 to 2010, 19 % in 2011 ; and 21 % in 2012.

from 2011, an exceptional contribution on high incomes is applied. It is based on the reference
taxable income (“revenu fiscal de référence”). The top rate is 4% over 500 000 € for single
persons and 1 000 000 € for couples.

social contributions rate was set at 11% in 2008, 12.10% in 2009, 12.3 % in January 2011, 13.5
% in October 2011 and 15.5% from July 2012.
II.4. GERMANY
The 2008 Corporate Tax Reform has fundamentally changed the taxation of corporate income. The
central government corporate income tax rate has been lowered from 25 to 15 per cent. The reform also
66
reduced the sub-central government corporate income tax, which is now no longer deductible. This part of
the Reform came into force in the year 2008 and applies to corporate profits of this year onwards. The
corporate profits of the year 2007 that were distributed as dividends in 2008 were subject to the old
legislation, i.e. half of dividend income was included into tax assessment and taxed with a maximum
income tax rate of 45 per cent.
The second part of the Corporate Tax Reform that came into force in 2009 changed the taxation of
dividends. It refers to dividends distributed from corporate profits of the year 2008 already subject to the
new legislation. The withholding tax is now final at a rate of 25 per cent with an option for including
dividend income into income tax assessment. Together with a surtax of 5.5 per cent, the net personel tax
rate amounts to 26.4 per cent.
II.4. GREECE
1. Corporations (SAs)
Over the last decade, Greece has been reducing the statutory corporate tax rate, which was 40% in
2000. The tax reform of 2008 foresaw a gradual reduction by 1% per year of the rate for the years between
2010 and 2014 (from 25% to 20%).
In 2012, the statutory Corporate Income Tax was 20%, whereas a 25% withholding tax applied to
distributed profits in the form of dividends, Board and Directors fees, additional compensation of directors
and employees other than wages, as well as interim dividend payments.
Under the Law 4110/2013, the statutory Corporate Income Tax for 2013 onwards is 26% and the
withholding tax rate on profit distributions approved as of 1.1.2014 is 10%..
2. Limited Liability Companies (LLCs) & Private Capital Companies (PCCs)
In general, Limited Liability Companies and Private Capital Companies are treated the same way with
Corporations.
3. Partnerships, civil law communities, joint ventures, and other entities.
From 2007 onward to 2012, the tax rate imposed on the profits corresponding to the shares of
individual unlimited partners of OE and EE, was 20%. and for all the other cases (profits of legal entities
partners, limited partners of EE, joint ventures, civil, participation, nominee, legal services companies), the
applicable tax rate was 25%.
From 2013 onwards, all legal entities are taxed at a rate of 26% for income up to 50.000€ and 33% for
any exceeding amount. However, the entities which maintain double entry accounting books, have the
same tax treatment with Corporations (26% tax rate & 10% withholding tax rate on distributed profits).
For more details see explanatory notes to Table II.1.
67
General note to Part II, Table 4
TAX RATES FOR LEGAL ENTITIES
(1993 – 2012)
Type of legal
person
Limited &
unlimited
partnerships,
Civil law
communities
Joint
ventures,
Civil
companies,
Participation
and nominee
companies
Legal
services
companies of
L.518/89,
Notary
companies of
L.284/93
1/1/1993–
31/12/1998
1/1/199931/12/1999
1/1/2000 –
31/12/2004
1/1/200531/12/2005
1/1/200631/12/2006
1/1/200731/12/09
1/1/1031/12/12
35%
30%
25%
24%
22%
20%
20%
35%
35%
35%
32%
29%
25%
25%
35%
30%
25%
25%
25%
25%
25%
Partnerships, joint ventures - other legal entities maintaining single entry accounting books
(2013 onwards)
Income
bracket
(€)
50.000
Excess
Tax rate
(%)
26%
Tax bracket
(€)
13.000
Total amount of
Income (€)
50.000
Tax (€)
13.000
33%
II.4. HUNGARY
PIT on the dividends paid as from 2011 is generally 16 per cent with additional 14% health
contribution which is capped at 450,000 HUF..
Tax on the dividends paid in the period 2009-2010 was 25 per cent, with additional 14% health
contribution, which is capped at 450,000 HUF. From 2007 until 2011 dividends paid by companies
registered at the stock exchange were taxed by a rate of 10 per cent.
PIT on the dividends paid in the period 2004-2008 was determined as follows:
1.
the value falling on the private person in question from the part of the equity of the business
association was calculated in proportion to the pecuniary stake (share, business quota, property
note etc.) of the private person entitled to dividend;
68
2.
the part of the amount indicated in paragraph a) was multiplied by 0.3; and
3.
the rate of tax was 20 per cent (in the case of dividends paid in the period 2004-) and was 25 per
cent (in the case of dividends paid in the period 2005-2008) on the part of the amount paid to the
private person on grounds of dividend and not exceeding the amount determined in paragraph b),
while the rate of the tax on the further part was 35 per cent.
4.
In 2007-2008 with additional 14% health contribution which is capped at 450,000 HUF. In 2006
with additional 4% health contribution which is capped at 400,000 HUF.
Tax on the dividends paid in the period 2000-2003 was determined as follows:

the value falling on the private person in question from the part of the equity of the business
association was calculated in proportion to the pecuniary stake (share, business quota, property
note etc.) of the private person entitled to dividend;

the part of the amount indicated in paragraph a) was calculated in accordance with double the
basic rate of interest of the central bank valid on the first day of the year of establishment of the
dividend; and

the rate of tax was 20 per cent on the part of the amount paid to the private person on grounds of
dividend and not exceeding the amount determined in paragraph b), while the rate of the tax on
the further part was 46 per cent (= personal income tax of 35 + in 2000-2002 with additional 11%
health contribution).
II.4. IRELAND
From 1999 Ireland moved from a partial imputation system to a classical system. Dividend tax credits
are shown in the following table:
Period
Tax credit
3/12/1997 to 5/4/1999
11/89
6/4/1997 to 2/12/1997
21/79
6/4/1995 to 5/4/1997
23/77
6/4/1991 to 5/4/1995
25/75
6/4/1989 to 5/4/1991
28/72
6/4/1988 to 5/4/1989
32/68
6/4/1983 to 5/4/1988
35/65
6/4/1978 to 5/4/1983
30/70
The Irish tax year changed in 2001 from April-April to calendar year. Tax credits in Table II.4 have
been weighted to express them in terms of calendar year in the calculations for years 1983, 1988, 1989,
1991, 1995 and 1997 as in the following example for the year 1983: tax credit = ((30/70)*3(35/65)*9)/12.
II.4. ISRAEL
From 1987 and until 2005 Israeli individuals paid a 25 percent tax on dividends received from Israeli
companies. In 2006 the rate was lowered to 20 percent for regular shareholders but maintained at 25
69
percent for ‘substantial shareholders’( ie those with an interest in the company of greater than 10 percent ).
In 2012 the rate was increased to 25% for regular shareholders and to 30% for ‘substantial shareholders'
Also from 2006, a Holding company is exempt from Israeli tax on

dividends received and capital gains from the sale of Held Companies in which it has a 10
percent shareholding interest and

interest, dividends and capital gains from securities publicly traded in the Israeli Stock Exchange.
Dividends paid from the Holding Company to foreign shareholders are subject to a 5 percent tax and a
foreign shareholder will enjoy a capital gain exemption upon its sale of shares in the Holding Company.
II.4. ITALY
Up to 1998 the following rules applied: the company pays IRPEG in year t and distributes the
dividends in year t+1. The shareholder pays IRFEF in year t+1 when he receives his dividend and receives
an imputation tax credit for the IRPEG paid in year t (these rules applied under the imputation system in
force until 2003). The data in table II.4 relates to the taxes in year t and does not consider that the tax credit
is received only in year t+1.
For the years from 1981 to 1997, in which ILOR was in force, the rate shown in column 2 for CIT on
distributed dividends is the result of the sum of the IRPEG and ILOR rates, adjusted, if necessary, to make
allowance for the deductibility of ILOR from the IRPEG taxable base. The tax credit was nevertheless only
allowed for the IRPEG paid on the dividend (column 8 only shows the IRPEG rate).
From 1998, taxpayers with “non-qualified” shareholdings could opt for a final withholding tax with a
rate of 12.5% instead of having their dividends taxed under the ordinary personal income tax (IRPEF). The
fixed withholding tax is always advantageous for taxpayers with “non-qualified” shareholdings paying the
top marginal PIT rate. Also in case of capital gains from “non-qualified” shareholdings and interest income
the taxpayer can opt for a final withholding tax at the rate of 12.5%.
After 1st January 2012 (Law Decree 201/2011), the tax rate applied to dividend income from nonqualified shareholdings and to capital gains realized on non-qualified shareholdings is equal to 20%.
From 1998 onwards, the tables report the dividends tax treatment for individual taxpayers with “nonqualified” shareholdings.2
The taxation of dividends for individual taxpayers with “qualified” shareholdings has changed as of 1
January 2004, when a new corporate income tax, IRES, was introduced with a statutory tax rate of 33%.
The imputation method previously used to eliminate dividend double taxation has been replaced with the
exemption method: dividends are exempted up to 60% for taxpayers subject to IRPEF.
2
“Qualified” shareholdings refer to a percentage of voting rights greater than 2% or 20% depending on
whether the company is respectively listed at the stock exchange or not; equivalently, a shareholding is
“qualified” if it represents a holding in the capital greater than 5% or 25% depending on whether the
company is respectively listed at the stock exchange or not.
70
Because the corporate income tax rate was reduced from 33% to 27.5% with effect from 1 January
2008, new percentages of exemption/taxation for dividends and capital gains from qualifying participations
are implemented to match such reduction, while maintaining the level of the overall tax burden.
Specifically, the new percentage of taxation is 49.72%, and the new percentage of exemption is
correspondingly reduced from 60% to 50.28%. The new exemption/taxation percentage applies to:

dividends paid out of profits realized on the tax period starting on or after 31 December 2007

capital gains realized after 1 January 2009
II.4. KOREA
There is a withholding tax rate on interests and dividends of 14 per cent (15 per cent prior to 2005).
Income from interest and dividend exceeding 20 million is subject to global taxation (taxed as ordinary
income under the personal income tax).
II.4. MEXICO
In 2013
, distributed dividend income is subject to the regular corporate income tax of 30 per cent calculated
on the basis of the grossed-up dividend. Individuals must consider the grossed-up dividend as part of their
taxable income and may credit against their personal income tax liability the 30 per cent tax already paid
by the firm. A similar system has been applied since 2002.
In 2001 and 2000, the distributed dividend income was subject to the regular corporate income tax
rate of 35 per cent, plus a 5 per cent withholding tax calculated on the basis of the grossed-up dividend. For
individuals, the 40 per cent tax was either final or creditable against personal income tax liabilities.
Reinvested profits paid the deferred 5 per cent corporate income tax when they were distributed as
dividends.
II.4. NETHERLANDS
A rate of 25% applies to all income from substantial interests in the hands of the shareholder. A
taxpayer is regarded as having a substantial interest in a company if she/he, either alone or together with
his partner, holds, directly or indirectly, at least 5% of the shares of that company. The table does not
model the tax burden on distributed dividends when the shareholder does not have a substantial holding in
the company. When shares do not qualify as a substantial interest, a return of 4% is deemed to be received
on the value of the underlying ‘ordinary’ shares and (since 2001) this deemed return is taxed at a rate of
30%. This ‘presumptive capital income tax’ has been introduced as from January 2001 and applies (except
in case of a substantial holding) to all personal income from savings and investments (e.g. interest,
dividend, capital gain). For 2007, the PIT rate applicable to taxable income from substantial interests was
reduced for one year to 22% for the first EUR 250 000. From 2008 the rate of 25% returned into force.
Foreign taxpayers are subject to a final withholding tax on dividends of 15% (dividend tax).
II.4. NORWAY
Norway abolished the full imputation system in 2006 and introduced personal taxation of dividends
and gains (the Shareholder Model). The total effective tax rate (CIT + PIT) on dividends is 48,16 pct., and
the shareholder is allowed a deduction equal to the risk-free market interest rate times the cost price of the
share.
71
II.4. PORTUGAL
As from 2013, the dividend income is subject to a 28% final withholding tax. However, the taxpayer
may opt to include 50 per cent of the dividend income in his taxable income and be taxed at the general
personal income tax rates.
From 2002 to 2005, 50 per cent of the dividend income is added to the taxable income and subject to
the general personal income tax rates.
In 2000 and 2001, the dividend income could be included in the taxable income by option of the
taxpayer in which case he was entitled to a tax credit in the amount of the withholding tax as well as to
another tax credit corresponding to an amount equal to 60 per cent of the corporate income tax levied on
the profits placed at the disposal of the beneficiaries.
II.4. SLOVENIA
In the years 2000 - 2005 a partial inclusion system was in place with a proportion of dividend income
being taxed progressively with the top marginal personal income tax rate of 50 per cent. In 2006 this was
replaced by the classical system within the dual income approach. Under the new system, income from
capital (ie interest, dividends and capital gains) has been taxed at proportionate rates on a scheduler basis.
Dividends are taxed at a proportionate rate of 25% since 2013 (20 % till 2012).
II.4. SWITZERLAND
Combined (central and sub-central and local) top marginal personal income tax rate after applying the
multiple for sub-central and local taxes where applicable,, as reported in Tables I.5-I.7, imposed on
dividend income in the city of Zurich, canton of Zurich. Zurich employs a MCL system (dividend income
is taxed at 50% of the income tax rate at the shareholder level for participations exceeding 10%) as of
1.1.2008. The church tax is excluded, as individuals can avoid paying church taxes. For federal tax, a MCL
system is employed as of 1.1. 2009 (dividend income is taxed at 50% of the income tax rate at the
shareholder level for participations exceeding 10%).
II.4. UNITED STATES
The combined (central and sub-central) top marginal personal income tax rate includes a weighted
average state marginal income tax rate on dividend income provided by the National Bureau of Economic
Research (www. nber.org).
PART III. SOCIAL SECURITY CONTRIBUTION TABLES
Part III, Table 1
III.1. AUSTRIA
The SSC rates are for workers, and they are lower for other employees. They also include
72
Contributions for the promotion of residential buildings (Payroll tax in Revenue Statistics) and for the
Chamber of Labour (Tax on Income in RevSt), which are levied by health security institutions on the same
base (but only on 12 current pays) as SSC.
The lower threshold is not a contribution-free amount which is deducted from the base, but an amount
below which the employee can choose to be insured by social security, in which case pension and health
SSC (no unemployment insurance) amounts to 54,9 € in 2013 (2012: 53.10€ all amounts for a worker) per
month would have to be paid. For employees above the threshold, the whole gross income (up to the upper
threshold) is taken as base for SSC.
III.1. BELGIUM
The rate of the personal social security contribution listed in table III.1 is the sum of different items.
Up to the third quarter of 1982 there were upper thresholds for some items. These thresholds were
abolished starting form October 1982.
total
Employee
ssc
1980Q1
1980Q2
1980Q3
1980Q4
1981Q1
1981Q2
1981Q3
1981Q4
1982Q1
1982Q2
1982Q3
1982Q4
in %
10,1
10,1
10,1
10,13
10,1
10,4
10,4
10,4
10,07
10,82
10,82
10,82
of wich
upper treshold (BEF per quarter)
pension
s
Medical
care
sickness
allowance
s
6
6
6
6
6,25
6,25
6,25
6,25
6,25
7
7
7
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,8
1,1
1,1
1,1
1,13
1,15
1,15
1,15
1,15
1,15
1,15
1,15
1,15
Unemployment
1,2
1,2
1,2
1,2
0,9
1,2
1,2
1,2
0,87
0,87
0,87
0,87
pensions
54150
55225
56325
70400
71800
73225
73225
76200
95625
97525
99475
-
Medical
care
-
Sickness
allowances
54150
55225
56325
70400
71800
73225
73225
76200
95625
97525
99475
-
Unemployment
32750
33400
34075
34750
71800
-
Since 1.1.2000, a reduction in personal social security contributions is granted for low salaries. This
“workbonus” is granted monthly in accordance with the level of the salary.
Table of the reduction in personal social security contributions for an employee, in €, from 1.01.2013)
Yearly gross salary (Sb) in €
0 < Sb < 18 021.84
18 021.84 < Sb < 28 624.92
Sb > 28 624.92
Yearly reduction in €
2 100
2 100 - 0.1981 (Sb – 18 021.84)
0
Yearly maximum in €
2 100.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.12.2012)
Yearly gross salary (Sb) in €
0 < Sb < 18 021.84
18 021.84 < Sb < 21 996.60
21 996.60 < Sb < 28 624.92
Sb > 28 624.92
Yearly reduction in €
2 100
2 100 - 0.2584 (Sb – 18 021.84)
1 716 - 0.1618 (Sb – 18 021.84)
0
Yearly maximum in €
2 100.00
73
Table of the reduction in personal social security contributions for an employee, in €, from 1.02.2012)
Yearly gross salary (Sb) in €
0 < Sb < 17 668.80
17 668.80 < Sb < 21 565.56
21 565.56 < Sb < 28 062.96
Sb > 28 062.96
Yearly reduction in €
2 100
2 100 - 0.2636 (Sb – 17 668.80)
1 716 - 0.1651 (Sb – 17 668.80)
0
Yearly maximum in €
2 100.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.05.2011)
Yearly gross salary (Sb) in €
0 < Sb < 17 322.48
17 322.48 < Sb < 21 142.80
21 142.80 < Sb < 27 511.92
Sb > 27 511.92
Yearly reduction in €
2 100
2 100 - 0.2743 (Sb – 17 322.48)
1 716 - 0.1718 (Sb – 17 322.48)
0
Yearly maximum in €
2 100.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.09.2010)
Yearly gross salary (Sb) in €
0 < Sb < 16 982.88
16 982.88 < Sb < 20 728.44
20 728.44 < Sb < 26 973.96
Sb > 26 973.96
Yearly reduction in €
2 100
2 100 - 0.2743 (Sb – 16 982.88)
1 716 - 0.1718 (Sb – 16 982.88)
0
Yearly maximum in €
2 100.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.10.2008)
Yearly gross salary (Sb) in €
0 < Sb < 16 649.88
16 649.88 < Sb < 20 322.00
20 322.00 < Sb < 26 444.64
Sb > 26 444.64
Yearly reduction in €
2 100
2 100 - 0.2798 (Sb – 16 649.88)
1 716 - 0.1752 (Sb – 16 649.88)
0
Yearly maximum in €
2 100.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.9.2008)
Yearly gross salary (Sb) in €
0 < Sb < 16 349.88
16 349.88 < Sb < 26 444.64
Sb > 26 444.64
Yearly reduction in €
1 716
1 716 - 0.1700 (Sb – 16 349.88)
0
Yearly maximum in €
1 812.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.5.2008)
Yearly gross salary (Sb) in €
0 < Sb < 16 029.36
16 029.36 < Sb < 25 926.12
Sb > 25 926.12
Yearly reduction in €
1 716
1 716 – 0.1734 (Sb – 16 029.36)
0
Yearly maximum in €
1 716.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.1.2008)
Yearly gross salary (Sb) in €
0 < Sb < 15 715.08
15 715.08 < Sb < 25 418.52
Yearly reduction in €
1 716
1 716 - 0.1768 (Sb – 15 715.08)
Yearly maximum in €
1 716.00
74
Sb > 25 418.52
0
Table of the reduction in personal social security contributions for an employee, in €, from 1.4.2007)
Yearly gross salary (Sb) in €
0 < Sb < 15 406.92
Yearly reduction in €
1 716
Yearly maximum in €
15 406.92 < Sb < 24 919.56
Sb > 24 919.56
1 716 - 0.1804 (Sb – 15 406.92)
0
1 707.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.10.2006)
Yearly gross salary (Sb) in €
0 < Sb < 15 106.56
15 106.56 < Sb < 24 919.56
Sb > 24 919.56
Yearly reduction in €
1 680
1 680 - 0.1712 (Sb – 15 106.56)
0
Yearly maximum in €
1 680.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.1.2006)
Yearly gross salary (Sb) in €
0 < Sb < 14 810.76
14 810.76 < Sb < 24 431.52
Sb > 24 431.52
Yearly reduction in €
1 680
1 680 - 0.1746 (Sb – 14 810.76)
0
Yearly maximum in €
1 680.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.8.2005)
Yearly gross salary (Sb) in €
0 < Sb < 14 810.76
14 810.76 < Sb < 20 441.04
Sb > 20 441.04
Yearly reduction in €
1 500
1 500 - 0.2664 (Sb – 14 810.76)
0
Yearly maximum in €
1 440.00
Table of the reduction in personal social security contributions for an employee, in €, from 1.4.2005)
Yearly gross salary (Sb) in €
0 < Sb < 14 520.12
14 520.12 < Sb < 20 040.00
Sb > 20 040.00
Yearly reduction in €
1 500
1 500 - 0.2717 (Sb – 14 520.12)
0
Yearly maximum in €
1 440.00
Table of the reduction in personal social security contributions for an employee, in €, on 1.1.2005)
Yearly gross salary (Sb) in €
0 < Sb < 14 328.36
14 328.36 < Sb < 20 040.00
Sb > 20 040.00
Yearly reduction in €
1 260
1 260 - 0.2206 (Sb – 14 328.36)
0
Yearly maximum in €
1 440.00
Table of the reduction in personal social security contributions for an employee, in €, on 1.10.2004)
Yearly gross salary (Sb) in €
0 < Sb < 14 615.64
14 615.64 < Sb < 18 841.92
Sb > 18 841.92
Yearly reduction in €
1 140
1 140 - 0.2697 (Sb – 14 615.64)
0
Yearly maximum in €
1 140.00
75
Table of the reduction in personal social security contributions for an employee, in €, on 1.1.2004)
Yearly gross salary (Sb) in €
0 < Sb < 14 328.36
14 328.36 < Sb < 18 471.60
Sb > 18 471.60
Yearly reduction in €
1 140
1 140 - 0.2751 (Sb – 14 328.36)
0
Yearly maximum in €
1 140.00
Table of the reduction in personal social security contributions for an employee, in €, on 1.6.2003)
Yearly gross salary (Sb) in €
0 < Sb < 10 947.48
10 947.48 < Sb < 14 328.36
14 328.36 < Sb < 18 471.60
Sb > 18 471.60
Yearly reduction in €
0
1 140
1 140 - 0.2751 (Sb – 14 328.36)
0
Yearly maximum in €
1 140.00
Table of the reduction in personal social security contributions for an employee, in €, on 1.1.2003)
Yearly gross salary (Sb) in €
0 < Sb < 10 733.04
10 733.04 < Sb < 14 047.68
14 047.68 < Sb < 18 110.04
Sb > 18 110.04
Yearly reduction in €
0
1 140
1 140 - 0.2806 (Sb – 14 047.68)
0
Yearly maximum in €
1 140.00
Table of the reduction in personal social security contributions for an employee, in €, on 1.2.2002)
Yearly gross salary (Sb) in €
0 < Sb < 10 733.04
10 733.04 < Sb < 14 047.68
14 047.68 < Sb < 16 731.00
Sb > 16 731.00
Yearly reduction in €
0
981.60
981.60 - 0.3658 (Sb – 14 047.68)
0
Yearly maximum in €
981.66
Table of the reduction in personal social security contributions for an employee, in €, on 1.6.2001)
Yearly gross salary (Sb) in €
Yearly reduction in €
0 < Sb < 10 522.80
0
10 582.80 < Sb < 13 772.40
981.60
13 772.40 < Sb < 16 402.92
981.60 - 0.3732 (Sb – 13 772.40)
Sb > 16 402.92
0
Table of the reduction in personal social security contributions, in €, on 1.9.2000)
Yearly gross salary (Sba) in €
0 < Sba < 10 316.28
10 316.28 < Sba < 13 502.28
13 502.28 <Sba < 16 081.32
Sba > 16 081.32
Reduction in €
0
981.60
981.60 - 0.3806 (Sba - 13 502.28)
0
Yearly maximum in €
981.66
Yearly maximum in €
929.60
Table of the reduction in personal social security contributions, in €, on 1.7.2000)
Yearly gross salary (Sba) in €
0 < Sba < 10 106.88
Reduction in €
0
Yearly maximum in €
929.60
76
10 106.88 < Sba < 13 237.56
13 237.56 <Sba < 15 766.08
Sba > 15 766.08
981.60
981.60 - 0.3882 (Sba - 13 237.56)
0
Table of the reduction in personal social security contributions, in €, on 1.4.2000)
Yearly gross salary (Sba) in €
0 < Sba < 10 106.88
10 106.88 < Sba < 13 237.56
13 237.56 <Sba < 15 766.08
Sba > 15 766.08
Reduction in €
0
981.60
981.60 - 0.39 (Sba - 13 237.56)
0
Yearly maximum in €
929.60
Table of the reduction in personal social security contributions, in €, on 1.1.2000)
Yearly gross salary (Sba)
0 < Sba < 10 106.88
10 106.88 < Sba < 12 642.60
12 642.60 <Sba < 14 576.16
Sba > 14 576.16
Reduction
0
773.40
773.40 - 0.4 (Sba – 12 642.60)
0
Yearly maximum in €
929.60
III.1. CANADA
Employment Insurance (EI) provides temporary financial help to unemployed Canadians while they
look for work or upgrade their skills, while they are pregnant or caring for a new-born or adopted child, or
while they are sick. Active re-employment benefits and support measures are delivered in co-operation
with the provinces and territories. For 2013, employee Employment Insurance contributions are 1.88 per
cent of annual earnings up to $47 400. Those contributions were 2.4 per cent, 2.25 per cent, 2.22 per cent,
2.1 per cent, 1.98 per cent, 1.95 per cent, 1.87 per cent, 1.80 per cent, 1.73 per cent, 1.73 per cent, 1.73 per
cent,1.78 per cent and 1.83 per cent in 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010,
2011 and 2012 respectively.
The Canada Pension Plan (CPP) is a compulsory earnings-based national plan that provides retirement
pensions – as well as survivor, disability and death benefits. The Plan is financed by contributions and
investment returns on accumulated assets. Benefit levels are linked to earnings on which contributions are
made. CPP revenues, assets and expenditures are not included in the accounts of the government of
Canada. The province of Quebec administers and operates a parallel program, the Quebec Pension Plan
(QPP). Starting in 2012, employee Quebec Pension Plan contributions are no longer harmonized with
employee Canada Pension Plan contributions. For the year 2013, employee Canada Pension Plan and
Quebec Pension Plan contributions are respectively 4.95 per cent and 5.1 per cent of annual earnings
between $3 500 and $51 100. Those contributions were 3.9 per cent of annual earnings between $3 500
and $37 600 in 2000, 4.3 per cent of annual earnings between $3 500 and $38 300 in 2001, 4.7 per cent of
annual earnings between $3 500 and $39 100 in 2002, 4.95 per cent of annual earnings between $3 500 and
$39 900 in 2003, 4.95 per cent of annual earnings between $3 500 and $40 500 in 2004, 4.95 per cent of
annual earnings between $3 500 and $41 100 in 2005, 4.95 per cent of annual earnings between $3 500 and
$42 100 in 2006 and 4.95 per cent of annual earnings between $3 500 and $43 700 in 2007,4.95 per cent of
annual earnings between $3 500 and $44 900 in 2008, 4.95 per cent of annual earnings between $3 500 and
$46 300 in 2009, 4.95 per cent of annual earnings between $3 500 and $47 200 in 2010, 4.95 per cent of
annual earnings between $3 500 and $48 300 in 2011, and 4.95 per cent (5.025 per cent in Quebec) of
annual earnings between $3 500 and $50 100 in 2012. Employees receive a non-refundable income tax
credit for contributions made to EI and C/QPP. The federal credit was 15 per cent of contributions in
2012, 2011, 2010, 2009, 2008 and 2007; 15.25 per cent of contributions in 2006; 15 per cent of
77
contributions in 2005; 16 per cent of contributions in 2004, 2003, 2002 and 2001; and 17 per cent of the
contributions in 2000. The federal credit rate for 2013 is 15 per cent. The provinces and territories also
provide non-refundable income tax credits at rates that approximate their lowest personal income tax rate.
III.1. CHILE
a. Employee social security contributions classified as taxes
In addition to the general contributions for health care, the following social contributions paid by
minority groups in Chile are classified as taxes on the basis of the OECD Interpretive Guide

Legacy contributions to public pension funds

Contributions for health and pensions paid by the police

Contributions for health and pensions paid by the army
The upper limit thresholds in Chile are expressed in UF ( Unidad de Fomento ) which is a unit of
account adjustable daily in line with the CPI. The upper limit threshold in each payment period represents
60 UF.
b. Employee social security contributions classified as non-tax compulsory payments
There are also a number of categories of contributions to private funds that are not classified as
taxes.Chile has had a private pension system since January 1980 and a dual health system (both public and
private health insurance) since 1981.
Chilean employees pay the following mandatory contributions to private funds.

10% of gross earnings to finance retirement, disability and survivorship pensions. The payments
are deposited in individual capitalization accounts managed by Pension Fund Administrators.

An additional contribution, fixed by each Administrator, to finance the operations of the fund.

A small group of employees who perform heavy work also pay a contribution equivalent to 2%
of their gross earnings into their individual capitalization account. The National Ergonomic
Commission can reduce the contribution rate from 2% to 1% when giving a “heavy” rating to a
particular job.

7% of gross earning to contributions to private funds for health care.

From October 2002, employees with 0.6% to the unemployed insurance, when the worker has an
"indefinite term employment contracts”. Employees with "fixed-term employment contracts" do
not have to contribute.
The five mentioned contributions are subject to an upper threshold limit, which is adjusted yearly :
2009 and previous years
Unemployment insurance
Rest of the contributions
90 UF
60 UF
78
2010
97.1 UF
64.7
2011
99 UF
66 UF
2012
101.1 UF
67.4 UF
2013
105.4 UF
70.3 UF
All the above contributions are deducted from taxable incomes.
It is also possible to make additional voluntary contributions for pensions and health care. These are
also deductible from taxable income except where the employee pays more than 4.921 UF for health care,
or more than 50 UF per month or 600 UF per year for voluntary pension fund savings.
III.1. CZECH REPUBLIC
The rates of social security contributions for employees are:
employee
pension
insurance
contributions
6.5 %
sickness
insurance
contributions
0%
contributions to
state employment
policy
0%
health insurance
contributions
Total
4.5 %
11 %
III.1. GERMANY
Part of the employee contributions is deductible (see description in country chapter of ‘Taxing
Wages’).
III.1. GREECE
The great majority of individuals who are employed in the private sector and render dependent
personal services are principally, directly and compulsorily insured in the Social Insurance Organisation
(IKA). Apart from the main contribution, IKA compulsorily collects contributions for other minor Funds
created for the employee’s benefit (Unemployment Benefits Funds, etc.). A subsidiary Social Insurance
Fund (ETEAM) for employees who are principally insured in IKA has been also established since 1983.
As regards the medical care, the National Organization for Healthcare Provision (EOPPY) was set up
in 2011 with the Law 3918/11 art.17, absorbing the most important social security funds (IKA-ETAM,
OGA, OAEE, OPAD) providing medical care for employees, self-employed, civil servants etc.
The average rates of contributions payable by white-collar employees as a percentage of gross
earnings are as follows (%) (Since 1-1-03):
1. Social Insurance Organisation (IKA)
2. Subsidiary Social Insurance Fund (ETEAM)
3. Other Funds
Total
Employer
Employee
Total
18.43
3.00
7.13
28.56
9.22
3.00
4.28
16.50
27.65
6.00
11.41
4.56
79
For blue-collar workers engaged in heavy work (unhealthy, dangerous etc), higher contributions are
due (19.45% paid by the employee and 30.21% paid by the employer), so that such individuals become
entitled to pension five years earlier than when the normal age limit applies. In the industrial sector, a
contribution at a rate of 1 per cent is added as an occupational risk contribution which is paid by the
employer, since the workers because of their difficult employment conditions are vulnerable to an
increased risk of labour accidents and occupational diseases. So the effective total rate of a mixed
insurance premium is 50.66% (employer’s contribution 31.21% and employee’s contribution 19.45%).
Contributions are calculated as percentages on the basis of monthly salary or wages paid but within
the limits specified in the National General Collective Employment Agreement. Monthly gross
remuneration includes salaries and wages, fringe benefits and bonuses and any profit distributions to
employees. A ceiling of €2,432.25 per month applies for individuals who have started working prior to 11-1993 (this cap is valid for the year 2012 and refers to the maximum amount of monthly wage for which
contributions are paid). On the other hand, for individuals who have started working after 1-1-1993, the
respective ceiling is €5,546.80 (for 2012).
The contributions are fully deductible for income tax purposes.
Note: The cap for the ‘old-insured’ in the monthly wage for which contributions are paid is calculated every year as follows: 25 x the
highest day’s wage of the highest insurance class as provided for by the Law (art.37 of Law 1846/1951) i.e. 25 x 97.29 = 2,432.25.
The cap for the ‘newly insured’ in the monthly wage for which contributions are paid is calculated every year as follows: 8 x average
GDP per capita of 1991 adjusted for the State rate of increase in pensions of public servants i.e. 8 x 693.35 = 5546.80.
III.1. ISRAEL
Social security contributions paid by employees are made up of a combination of those for National
Insurance and Health Insurance.
1. General background
National insurance
Every resident of Israel aged 18 and over is obligated by law to be insured by National Insurance and
to pay the national insurance contributions. The National Insurance branches are made up of the following
list; old age and survivors, long term care, general disability, accident and injury, work injury, maternity,
children, unemployment and bankruptcy.
Health insurance
In addition, every resident is registered in one of the country’s health maintenance organisations (
HMO ). and must pay contributions for health insurance. The contributions are collected by the National
Insurance Institute which distributes the moneys collected to the HMOs. The rates of contribution are
calculated according to the work status and the level of the person’s income ( earned plus unearned ). A
person who does not work and has no income (besides social benefits) pays a minimum amount depending
on status (unless she is a married housewife who is totally exempt).
Exemptions
80
There are exemptions from certain types of National Insurance contribution for some workers. For
example, career soldiers are exempt from maternity insurance and foreign workers are exempt from
national insurance contributions except for Work injury, Maternity and Bankruptcy.
2. Historical tax rates and thresholds
A reduced rate applies up to a lower threshold of 50% the average wage per employee post (raised to
60% of the average wage per employee post in January 2006). The regular rate applies up to a upper
threshold of around 5 times the average wage per employee post. The upper threshold was removed
between July 2002 and June 2003. In July 2003 the upper threshold was re-instated at a level of 5 times the
average wage per employee post. In August 2009 it was increased to 10 times the average wage per
employee post, then, in January 2011, decreased to 9 times the average wage per employee post . In
January 2012 the upper threshold was re-instated at a level of 5 times the average wage per employee post.
The following table shows the historical tax rates and thresholds:
Period
Jan2000-Dec2000
Jan2001-Dec2001
Jan2002-Mar2002
Apr2002-Jun2002
Jul2002-Dec2002
Jan2003-Jun2003
Jul2003-Dec2005
Jan2006-Dec2006
Jan2007-Dec2007
Jan2008-Dec2008
Jan2009-Jul2009
Aug2009-Dec2009
Jan2010-Dec2010
Jan2011-Dec2011
Jan 2012-Dec2012
Jan2013-Dec2013
Reduced rate
5.76
5.76
5.76
5.76
5.76
4.5
4.5
3.5
3.5
3.5
3.5
3.5
3.5
3.5
3.5
3.5
Lower threshold
3,174
3,482
3,525
3,482
3,482
3,482
3,482
4,430
4,522
4,598
4,757
4,757
4,809
4,984
5,171
5,297
Regular rate
9.7
9.7
9.7
9.7
9.7
10.32
10.38
12
12
12
12
12
12
12
12
12
Upper threshold
31,735
34,820
35,250
34,820
No limit
No limit
34,820
35,760
35,760
36,760
38,415
76,830
79,750
73,422
41,850
42,435
The 2013 full and reduced rates for employee contributions and their breakdown into those applying
to the Health insurance and the National Insurance branches are set out below. These figures have applied
since the beginning of 2006.
Branch
Insurance branches
Full rate
Reduced rate
contribution
contribution
(%)
(%)
7.00
0.40
81
Health
5.00
3.10
Total contributions
12.00
3.50
III.1. LUXEMBOURG
Since 2009, the SSC rates are equal for workers and employees.
III.1. MEXICO
Social security contributions paid by the employee are divided as follows:
1. For sickness and maternity insurance, 0.625 per cent of the employee’s monthly earnings, plus 0.40 per
cent (1.68% in 2000; 1.52% in 2001; 1.36% in 2002; 1.20% in 2003; 1.04% in 2004; 0.88% in 2005,
0.72% in 2006, 0.56% in 2007 and 0.40% as of January 1, 2008)3 of his monthly earnings in excess of
three times the monthly minimal wage in Mexico City ($64.76 pesos per day in 2013). These rates are
applied over different bases, therefore, they cannot be added into a single rate.
2. For disability, and life insurance, 0.625 per cent of the employee’s monthly earnings for the 10 years
reported.
Employee’s monthly earnings include wages and fringe benefits such as food vouchers and housing
benefits. For reporting purposes, the sickness and maternity insurance rates and the disability and life
insurance rate were applied separately to the monthly wage, since a different ceiling to the salary base
applies to these two contributions. Contributions to private retirement funds (AFORES) are not included in
social security contributions. (See comment on Table I.1-I.4)
Social security contributions paid by the employee are capped at $789 MXN in 2013 ($729 in 2000;
$740 in 2001; $736 in 2002; $724 in 2003; $710 in 2004; $694 in 2005, $679 in 2006, $661 in 2007, $ 641
in 2008, $668 in 2009, $700 in 2010, and $729 in 2011 and $759 MXN in 2012) pesos per month for
individuals earning an amount equivalent to 25 monthly minimum wages of the Mexico City ($64.76 pesos
per day in 2013) or more.
III.1 NETHERLANDS
The social security contribution paid by employees consists of several parts:
1.
Public insurance for medical care (social health plan).
Public insurance for medical care has been reformed in 2006. A new standard health insurance system
is introduced. Until 2005, no public health insurance contributions were levied on income in excess of
EUR 33 000. However, taxpayers earning more than EUR 33 000 were obliged to take a private insurance.
This was not included in the TW model. These private health insurance contributions were not included in
the Taxing Wages calculations. In 2006, all individuals above the age of 18 years are obliged to insure
themselves at a private insurance company and will be no part of the TW model. On average individuals
3 This rate decreased 0.16 percentage points on an annual basis. Starting in 2008 the applicable rate is 0.40 per cent.
82
pay a nominal premium to a private insurance company for the basic health insurance of (on average EUR
1,250 in year 2013) and in addition employers pay a percentage (7.75 per cent) of gross income net of
employees’ pension premiums and unemployment social security contribution until a maximum of EUR
50,853. From 2013 this system has changed. Before, employees had to pay the contribution, and received
a mandatory compensation of his employer for the same amount. This amount was included in the
taxpayer’s taxable income and is part of the TW model. As stated above, from 2013 this is considered to be
an employer’s contribution. This contribution of employers remains part of the non-tax compulsory
payments (NTCP) and is used for equalizing health insurance risks between insurance companies.
In the health insurance system competition is allowed between health insurance companies.
Competition takes place under strict conditions of the government to avoid risk selection by the health
insurance companies. The new standard private health system is quite similar to the old system before 2006
but it is now implemented by the private sector for all individuals and it allows more competition in the
health care market. The health insurance contributions are now included in the calculations of the NTCP in
the special feature of the Taxing Wages publication of 2009, but not in the standard publication of the
Taxing Wages model.
Taxpayers including self-employed might obtain compensation for the private nominal contribution of
EUR 1,250, depending on the taxpayer’s personal situation and gross income. This is called the care
benefit. The care benefit is calculated as follows for 2013:
 household of one adult : 1483 (med_adult for care benefit) – 2.195 per cent
(med_compensation 1) * 18,509 (med_key) – 8.713 per cent (med_compensation 2) *
(taxable income – 18,509 (med_key)).
 household of more than one adult: number of adults * 1483 (med_adult for care benefit) –
4.695 per cent (med_compensation 3) * 18,509 (med_key) – 8.713 per cent
(med_compensation 4) * (taxable income – 18,509 (med_key)).
2.
Unemployment scheme
Employees pay a percentage of earnings between a threshold and a ceiling:

From 2009, 0.0 percent

In 2008, 3.5 per cent of gross earnings between EUR 15 921 and EUR 46 205

In 2007, 3.85 per cent of gross earnings between EUR 15 660 and EUR 45 017

In 2006, 5.2 per cent of gross earnings between EUR 15 138 and EUR 43 848

In 2005, 5.85 per cent of earnings between EUR 15 080 and EUR 43 587.

In 2004, 5.8 per cent of earnings between EUR 15 196 and EUR 43 578.

In 2003, 5.8 per cent of earnings between EUR 14 877 and EUR 43 065.

In 2002, 4.95 per cent of earnings between EUR 14 486 and EUR 41 499.

In 2001, 5.25 per cent of earnings between NLG 30 537 and NLG 87 957.
83

In 2000, 6.25 per cent of earnings between NLG 28 971 and NLG 83 259,3.
3
General scheme (Old age pensions, widows and orphans pensions, exceptional medical
expenses and disability)
The following premiums are levied from taxable income up to a ceiling (percentages 2013)
Insurance
percentage
general old age pension
17.9%
pension for widows and orphans
10.6%
exceptional health care
12.65%
Total
31.15%
Total for taxpayers of 65 years and older
13.25%

The ceiling of taxable income for these premiums is EUR 33,363 (2013). It is adapted to inflation
every year

The (wastable) tax credits also apply to contributions to general social security schemes.

Taxpayers, older than 65 years do not pay premiums for general old age pension
III.1. POLAND
Social security contributions are paid monthly by employee (but calculated, collected and transfered
to Social Security Institution (Zakład Ubezpieczeń Społecznych – ZUS) by employers) and can be divided
into two groups:
 social insurance contributions – 13.71% of revenue as defined in Act on personal income tax
(which is approximately the same as gross wage), in which:
 old-age pension insurance contribution - 9.76 %
 disability pension insurance contribution - 1.5 % % (from year 2008), 3,5 % (July 2007 –
December 2007), 6,5 % (1999- June 2007),
 sickness insurance contribution - 2.45 %,

health insurance contribution – base of its assessment is base of assessment for social insurance
contribution minus employee’s contributions – rate was increased of 0.25% each year from 7.75
in year 2001 to 9% in 2007. This rate is still at present.
84
Employee’s social insurance contributions are fully deductible from taxable income, while health
insurance contribution is deductible from tax but only at rate 7.75%.
This rates can not be directly added because bases of their assessment are different.
If the insured person is a member of the open pension fund (OPF), a part of the contribution to his or
her old-age pension insurance is transferred by ZUS to OPF selected by the insured person. Since May
2011 the part of the contribution being transferred to OPF is reduced from the rate 7,3 % to 2,3 % of the
basis of assessment. This rate is scheduled to increase gradually and reach: 2,8 % in 2013, 3,1 % in 2014,
3,3 % in 2015 and finally 3,5 % in 2017.
Most people subject to social insurance accumulate their money for future pension in ZUS and a
chosen OPF. However there is a small group of the insured that are not obliged to save their money in any
OPF. These are:

persons born before 1949, that are excluded form the new system of saving for pension and
pay their contributions excluively to ZUS and will have their pension paid only from that
source,

persons born between 1949 and 1968, that could choose whether they wanted to pay their
contributions solely to ZUS or also to OPF.
The ceiling to contributions (old-age, disability) and pensionable earning is set at 2.5 times average
earnings projected for a given year in the state budget law. It is 111 390 PLN in 2013.
III.1. SLOVAK REPUBLIC
There is both a minimum (only for full-time employees) and a maximum contribution, defined by the
minimum base (the value given in the column for the lower threshold in the table) and the upper threshold.
For 2000-2003, these amounts were fixed values.
The upper thresholds for 2005 onwards are a function of the average wage, while the minimum base
is equal to the minimum wage (see the table below). For 2004, the same system applied, but the 4% health
contribution had a fixed minimum amount of 3,000 and upper threshold of 32,000. In 2008 there was a
change of multiple (from 3 to 4) for calculation of upper threshold for social insurance (see the table).
From 2011 onwards the change in upper thresholds were made (there is no change of upper thresholds
during the year as from 2011, see the table below). As from 2013 maximum assessment bases for social
and health security contributions has been increased and unified to 5 times the average wage (two years
prior to when contribution is paid).
85
Rate
Social
Insurance
8%
Sickness
Insurance
1.4%
Health
Insurance
4%
Rate
Social
Insurance
8%
Sickness
Insurance
1.4%
Health
Insurance
4%
Rate
All social
insurance
(9,4%) and
health
insurance
(4%)
Minimum base
(lower threshold)
Upper threshold 1.1-30.6
Upper threshold
1.7-31.12
Minimum
monthly wage
4 times the average wage two years
prior to when the contribution is paid
4 times the average wage in the year
prior to when the contribution is paid
Minimum
monthly wage
1.5 times the average wage two
years prior to when the contribution
is paid
1.5 times the average wage in the
year prior to when the contribution is
paid
Minimum
monthly wage
3 times the average wage two years prior to when the contribution is paid
Minimum base
(lower threshold)
Upper threshold 1.1-31.12
Minimum
monthly wage
4 times the average wage two years prior to when the contribution is paid
Minimum
monthly wage
1.5 times the average wage two years prior to when the contribution is paid
Minimum
monthly wage
3 times the average wage two years prior to when the contribution is paid
Minimum base
(lower threshold)
Minimum
monthly wage
Upper threshold 1.1-31.12
5 times the average wage two years prior to when the contribution is paid
The latest amendment of the Minimum wage act (663/2007) adjusted date of the minimum wage
indexation, which changed from October 1st to January 1st. After this amendment the effectiveness of the
minimum wage is identical with calendar year as from 2009. From 1st January 2013 the minimum monthly
wage is set at EUR 327.70.
Period
1.10.2006 - 30.9.2007
1.10.2007 - 31.12.2008
1.1.2009 – 31.12.2009
1.1.2010 – 31.12.2010
1.1.2011 – 31.12.2011
1.1.2012 – 31.12.2012
1.1.2013 – 31.12.2013
Statutory minimum monthly wage
The amount (in SKK)
7 600
8 100
8 900
-
The amount (in Eur)
252.3*
268.9*
295.5
307.7
317.0
327.2
337.7
*calculated by conversion rate ( 1Eur = 30.126 SKK)
86
Compulsory contributions for 2004 onwards of 13.4 per cent of gross wages and salaries (with no
limit) are paid by all employees into government operated schemes. The total is made up as follows:
Health Insurance
Social Insurance
of which:
4.0 per cent
9.4 per cent
Sickness
Retirement
Disability
Unemployment
1.4 per cent
4.0 per cent
3.0 percent
1.0 per cent
III.1. SLOVENIA
The compulsory social security insurance system consists of four schemes as follows:




pension and disability insurance;
health insurance;
unemployment insurance;
maternity leave insurance.
The taxable base for social security insurance contributions paid by employees is the total amount of the
gross wage or salary including vacation payments, fringe benefits and remuneration of expenses related to
work above a certain threshold. The assessment period is the calendar month. Employees contribute an
amount as a percentage of their remuneration as follows.
Scheme name
Rate of contribution
(%)
Pension insurance
15.50
Health insurance
6.36
Unemployment insurance
0.14
Maternity leave
0.10
87
Total
22.10
III.1. SPAIN
Social Security contributions are a fixed proportion of covered earnings between a floor and a ceiling,
which vary by broadly defined professional categories. Currently, eleven categories are distinguished. For
the first seven of them, floor and ceilings apply to monthly earnings. These floors and ceilings are shown
below for the year 2013. They are approximately equal to, respectively, the professional minimum wage
and three times the professional minimum wage. For the last four categories, floors and ceilings apply to
daily earnings
Professional Category
Engineers and university graduates
Qualified technicians and assistants
Clerical and Workshop supervisors
Non-qualified assistants
Clerical Officers and Assistants
Subordinates
Administrative Assistants
Workshop Officers
Sub officers and Skilled workers
Laborers
Workers lower than 18 years old
Minimum base
1,051.50 €/month
872.10 €/month
758.70 €/month
753.00 €/month
753.00 €/month
753.00 €/month
753.00 €/month
25.10 €/day
25.10 €/day
25.10 €/day
25.10 €/day
Maximum base
3,425.70 €/month
3,425.70 €/month
3,425.70 €/month
3,425.70 €/month
3,425.70 €/month
3,425.70 €/month
3,425.70 €/month
114.19 €/day
114.19 €/day
114.19 €/day
114.19 €/day
Social Security contributions made by taxpayers are addressed to cover the following contingencies:

Common contingencies: illness, non-labour accidents, retirement, maternity leave, etc.

Work injuries and professional diseases

Overtime work

Other contributions made for purposes such as:
Unemployment
Fund of Wage Guarantee
Professional Training
Social security contributions are calculated on the total monthly pay received by the employee,
excluding per diem allowances and travel expenses, distance and transport supplements, petty cash
allowances, work clothes and uniforms, death indemnities, relocation expenses and other minor items. As
stated before, there is a minimum floor and a maximum ceiling or base for the first seven professional
categories of employees (from engineers to administrative assistants; for the other four categories the
minimum and maximum bases are computed on a daily basis). Social security bases are fixed every year
by the General Budget Law. The tax rate is the percentage applied to the tax base. Tax rates are fixed every
year by the General Budget Law.
88
For 2013 the rates applied for employers are the following:
89
Employers
23.60%
5.50%
6.70%
7.70%
0.20%
0.6%
General Benefits Fund
Unemployment (general rate)
Unemployment (fixed duration – full time)
Unemployment (fixed time – part time)
Wage Guarantee Fund
Professional Training
III.1. SWEDEN
The social security contribution paid by employees is based on the sum of earnings and taxable
transfers.
III.1. UNITED KINGDOM
An employee aged 16 or over but below state pension age must pay primary Class 1 contributions
unless earnings for the pay period for each employment are below the primary threshold (PT) in which
case the payment is not made. Employees pay Class 1 contributions equal to 11 per cent of earnings above
the PT (£110 per week in 2010-11) up to the upper earnings limit (UEL: £844 pw in 2010-11). Employees
also pay contributions at 1 per cent above the UEL.
There is a contracted out rebate of 1.6 per cent of earnings between the lower earnings limit (LEL,
£97pw in 2010-11) and the upper accruals point (UAP) (£770 pw fixed from 2008-09 onwards)) for those
in contracted-out salary related schemes and contracted-out money purchase schemes. No contributions are
actually payable on earnings between LEL and PT but notional contributions are treated as having been
paid to protect benefit entitlement.
For appropriate personal pensions, the employer pays contributions at the standard not contracted-out
rate and an age and earnings related rebate is paid directly to the personal pension provider at the end of
the tax year.
From 1981-82 the structure for employees’ contributions was as follows:
Year
Lower limit of
earnings (£)
Upper limit of
earnings (£)
1981-82
1982-83
1983-84
1984-85
27.00
29.50
32.50
34.00
200
220
235
250
Not contracted-out
rate payable on all
earnings (%)
7.75
8.75
9.00
9.00
Contracted-out rate
payable on all
earnings (%)
5.25
6.25
6.85
6.85
The structure changed mid way through the year in 1985 so rates between October 1985 and April
1986 are not given in table III.1. They were as follows:
Weekly income (£)
0-35.50
35.50-55
55-90
90-265
Employee’s contribution rate payable on all earnings (%)
0
5.00
7.00
9.00
The structure remained unchanged until October 1989 when it changed again mid way through the
year. The rates that were applied between October 1989 and April 1990 are not given in table III.1 so are
90
given below.
Weekly income (£)
0-43
43-325
Employee’s contribution rate (%)
0
2% on first £43; 9% on balance
With the abolition of the 2 per cent entry fee on employee’s earnings below the lower earnings limit
in April 1999 the structure changed to that below:
Weekly income (£)
0-66
66-500
Employee’s contribution rate (%)
0
10.00
From 2003-04 the following structure was applied and has remained unchanged to date.
Weekly income (£)
0- (PT)
(PT) - (UEL)
> (UEL)
Employee’s contribution rate (%)
0
11.00
1.00
91
Part III, Table 2
III.2. AUSTRIA
The SSC rates are for workers, and they are lower for other employees. They also include
Contributions for the promotion of residential buildings (Payroll tax in ‘Revenue Statistics’), which are
levied by health security institutions on the same base (but only on 12 current pays) as SSC.
There is no lower threshold for accident insurance. Indeed, even for employees below the threshold,
the employer may have to pay accident SSC. If the wage sum is above 150 per cent of the lower threshold,
the employer has to pay health and pension contributions also for those employees below the lower
threshold.
III.2. BELGIUM
The rate of the employer social security contribution listed in table III.2 is the sum of different items.
Up to the third quarter of 1982 there were upper thresholds for some items. These thresholds were
abolished starting from October 1982. On top of the marginal rate applicable to the gross salary, there was
a lump sum to be paid from the third quarter of 1980 till the last of 1983.
employer
ssc
Marginal
rate
in %
of which
lump
sum
upper treshold (BEF per quarter)
pensi
ons
sickness
allowances
Unemployment
Educational
leave
pensions
sickness
allowanc
es
Unemployment
Educational
leave
firm
closures
1980Q1
24,15
8
1,8
1,7
0,05
54150
54150
32750
32750
0
1980Q2
24,15
8
1,8
1,7
0,05
55225
55225
33400
33400
0
1980Q3
24,15
8
1,8
1,7
0,05
56325
56325
34075
34075
0
1980Q4
24,18
8
1,83
1,7
0,05
57450
70400
34750
34750
2215
1981Q1
24,12
8,86
1,84
1,27
0,05
71800
71800
71800
71800
2215
1981Q2
24,1
8,86
1,84
1,27
0,03
73225
73225
73225
73225
2215
1981Q3
24,1
8,86
1,84
1,27
0,03
73225
73225
73225
73225
2215
1981Q4
24,1
8,86
1,84
1,27
0,03
76200
76200
76200
76200
2215
1982Q1
24,07
8,86
2,1
1,23
0,03
95625
95625
95625
95625
2436
1982Q2
24,07
8,86
2,2
1,23
0,03
97525
97525
97525
97525
2436
1982Q3
24,09
8,86
2,2
1,23
0,05
99475
99475
99475
99475
2436
1982Q4
24,09
2436
1983Q1
24,07
2680
1983Q2
24,12
2680
1983Q3
24,07
2680
1983Q4
24,07
2680
92
From 1982 till 1999 some “Maribel”- reductions were granted, but not in all sectors of economic
activity. Since 1999 these reductions were replaced by general “structural” reductions of employer social
security contributions. The amount varies in relation to the gross salary following the tables below.
As from 01.01.2013
Yearly gross salary (S) in €
0 < S < 23 600
23 600 < S < 49 939.20
S > 49 939.20
Yearly reduction in €
1 600 + 0.1620 (23 600 – S)
1 600
1 600 + 0.06 (S – 49 939.20)
As from 01.04.2012
Yearly gross salary (S) in €
0 < S < 23 482.84
23 482.84 < S < 48 960
S > 48 960
Yearly reduction in €
1 600 + 0.1620 (23 482.84 – S)
1 600
1 600 + 0.06 (S – 48 960)
As from 01.01.2012
Yearly gross salary (S) in €
0 < S < 23 482.84
23 482.84 < S < 48 000
S > 48 000
Yearly reduction in €
1 600 + 0.1620 (23 482.84 – S)
1 600
1 600 + 0.06 (S – 48 000)
As from 01.01.2010
Yearly gross salary (S) in €
0 < S < 24 120.00
24 120.00 < S < 48 000
S > 48 000
Yearly reduction in €
1 600 + 0.1620 (24 120.00 – S)
1 600
1 600 + 0.06 (S – 48 000)
As from 01.04.2007
Yearly gross salary (S) in €
0 < S < 23 482.84
23 482.84 < S < 48 000
S > 48 000
Yearly reduction in €
1 600 + 0.1620 (23 482.84 – S)
1 600
1 600 + 0.06 (S – 48 000)
As from 01.01.2005
Yearly gross salary (S) in €
0 < S < 23 482.84
23 482.84 < S < 48 000
S > 48 000
Yearly reduction in €
1 600 + 0.1444 (23 482.84 – S)
1 600
1 600 + 0.06 (S – 48 000)
93
As of 01.01.2004
Yearly gross salary (S) in €
0 < S < 21 240
21 240 < S < 48 000
S > 48 000
Yearly reduction in €
1 600 + 0.1750 (21 240 – S)
1 600
1 600 + 0.0173 (S – 48 000)
As of 01.04.2003
Yearly gross salary (S) in €
0 < S < 10 260.72
10 260.72 < S < 13 329.24
13 329.24 < S < 18 459.16
S > 18 459.16
Yearly reduction in €
1 390.36
2 945.56
2 945.56 - 0.3032 (S – 13 329.24)
1 390.36
As of 1.04.2002
Yearly gross salary (S) in €
0 < S < 10 260.72
10 260.72 < S < 13 329.24
13 329.24 < S < 18 459.16
S > 18 459.16
Yearly reduction in €
1 255.36
2 945.56
2 945.56 - 0.3295 (S – 13 329.24)
1 255.36
As of 1.04.2001
Yearly gross salary (S) in €
0 < S < 10 260.72
10 260.72 < S < 13 329.24
13 329.24 < S < 18 459.16
S > 18 459.16
Reduction in €
1 120.36
2 945.56
2 945.56 - 0.3558 (S - 13 329.24)
1 120.36
As of 1.04.2000
Yearly gross salary (S) in €
0 < S < 10 260.72
10 260.72 < S < 13 329.24
13 329.24 <S < 18 459.16
S > 18 459.16
Reduction in €
985.32
2 945.56
2 945.56 - 0.3821 (S - 13 329.24)
985.32
As of 1.04.1999
Yearly gross salary (S) in €
0 < S < 10 260.72
10 260.72 < S < 13 000.04
13 000.04 < S < 15 049.60
15 049.60 < S < 18 459.16
S > 18 459.16
Reduction in €
264.84
2 367.60
2 367.60 - 0.5509 (S – 13 000.04)
861.96
264.84
III.2. CANADA
Starting in 2012, employer Quebec Pension Plan contributions are no longer harmonized with
employer Canada Pension Plan contributions. In 2013, employer Canada Pension Plan contributions are
94
paid at a rate of 4.95 per cent and employer Quebec Pension Plan contributions are paid at a rate of 5.1 per
cent. The contribution rate for both was 3.9 per cent in 2000; 4.3 per cent in 2001; 4.7 per cent in 2002;
and 4.95 per cent in 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 (except in Quebec in
2012, where the rate was 5.025 per cent). Contributions at the aforementioned rates are/were paid on
employee earnings between $3 500 and $51 100 in 2013 ($37 600 in 2000, $38 300 in 2001, $39 100 in
2002, $39 900 in 2003, $40 500 in 2004, $41 100 in 2005, $42 100 in 2006, $43 700 in 2007, $44 900 in
2008, $46 300 in 2009, $47 200 in 2010, $48 300 in 2011 and 50,100 in 2012). Employer Employment
Insurance contributions are 2.56 per cent of each employee’s annual earnings up to $47,400 in 2013. The
comparable rates were 3.36 per cent in 2000, 3.15 per cent in 2001, 3.08 per cent in 2002, 2.94 per cent in
2003, 2.77 per cent in 2004, 2.73 per cent in 2005 and 2.62 per cent in 2006 of each employee’s annual
earnings up to $39 000; 2.52 per cent in 2007 of each employee’s annual earnings up to $40 000; 2.42 per
cent in 2008 of each employee’s annual earnings up to $41 000; 2.42 per cent in 2009 of each employee’s
annual earnings up to $42 300; 2.42 per cent in 2010 of each employee’s annual earnings up to $43 200;
2.49 per cent in 2011 of each employee’s annual earnings up to $44 200; and 2.56 per cent in 2012 of each
employee’s annual earnings up to $45 900.
III.2. CHILE
The main payments of employer social security contributions are not classified as taxes by the
Ministry of Finance in Chile.. In Chile the upper limit earnings limit thresholds are expressed in UF [
Unidad de Fomento ] which is a unit of account adjustable daily in line with the CPI.( see notes to Table
III.1 for further explanation). These payments are as follows:

- Occupational accident and disease insurance; employers make a mandatory payment of 0.95%
of the employee’s earnings subject to an upper earnings limit of 70.3 UF. In addition to this basic
rate, there are further payments of up to an extra 3.4% in the case of riskier activities. For the
majority of workers, these amounts are paid to employers’ associations of labour security which
are private non-profit institutions. For the remainder the contributions are paid to the Social
Security Regularisation Unit ( ISL ). Although this latter organisation is controlled by
government the funds that are collected are invested on the private market.

- Unemployment insurance; employers contribute 2.4% of an employee’s earnings ( 3% for
fixed-term contracts ) subject to an upper earnings limit of 105.4 UF. These funds are managed
privately.

A premium to an Insurance Company to cover the worker in the event of disability or death, since
July 2011.

If the employee performs heavy work, the employer also pays a contribution equivalent to 2% of
the worker gross earnings into his individual capitalization account. The National Ergonomic
Commission can reduce the contribution rate from 2% to 1% when giving a “heavy” rating to a
particular job.
There are also some legacy pension contributions that are classified as taxes and the occupational
accident and disease insurance payments that are paid to the ISL are presented as tax revenues in some
Chilean documents.
III.2. CZECH REPUBLIC
The rates of social security contributions for employers are:
95
employer
pension
insurance
contributions
sickness
insurance
contributions
21.5 %
2.3 %
contributions to
state
employment
policy
1.2 %
health insurance
contributions
Total
9%
34.0 %
III.2. GREECE
See explanatory note to Table III.1.
III.2. IRELAND
In 2002, the upper threshold was abolished hence no maximum contribution.
III.2. ISRAEL
The full amount of the employer contributions applies to the various National Insurance branches.
Employers do not pay any contributions for health insurance on behalf of their employees.
See the corresponding note for Table III.1 Employee social security contributions for the general
background.
Since July 2005 a reduced rate applies up to a lower threshold of 50% the average wage per
employee post (raised to 60% of the average wage per employee post in January 2006). The regular rate
applied up to a upper threshold of around 4 times the average wage per employee post until June 2002. The
upper threshold was removed between July 2002 and June 2003. In July 2003 the upper threshold was reinstated at a level of 5 times the average wage per employee post. In August 2009 it was increased to 10
times the average wage per employee post. In January 2011 it was decreased to 9 times the average wage
per employee post and back to 5 times the average wage per employee post in January 2012.
The regular rate increased from 5.93% in 2012 to 6.5% in 2013 and will increase to 7.0% in 2014 and
to 7.5% in 2015.
The following table shows the historical tax rates and thresholds:
Period
Jan2000-Dec2000
Jan2001-Dec2001
Jan2002-Mar2002
Apr2002-Jun2002
Jul2002-Dec2002
Jan2003-Jun2003
Jul2003-Jun2005
Jul2005-Dec2005
Jan2006-Dec2006
Jan2007-Dec2007
Jan2008-Dec2008
Reduced rate
5.33
4.98
4.14
3.85
Lower threshold
3,482
4,430
4,522
4,598
Regular rate
4.93
4.93
4.93
4.93
5.93
5.93
5.93
5.68
5.68
5.68
5.43
Upper threshold
25,388
27,856
28,200
27,856
No limit
No limit
34,820
34,820
35,760
35,760
36,760
96
Jan2009-Jul2009
Aug2009-Dec2009
Jan2010-Dec2010
Jan2011-Apr2011
Apr2011-Dec2011
Jan2012-Dec2012
Jan2013-Dec2013
3.45
3.85
3.85
3.85
3.45
3.45
3.45
4,757
4,757
4,809
4,984
4,984
5,171
5,297
5.43
5.43
5.43
5.43
5.90
5.90
6.5
38,415
76,830
79,750
73,422
73,422
41,850
42,435
III.2. LUXEMBOURG
Since 2009, the SSC rates are equal for workers and employees.
III.2. MEXICO
Social security contributions paid by the employer are divided as follows:
1.
Starting 2008 for sickness and maternity 20.40 per cent4 (15.2% in 2000, 15.85% in 2001, 16.5%
in 2002, 17.15% in 2003, 17.80% in 2004, 18.45% in 2005, 19.10% in 2006 and 19.75% in 2007)
of the monthly minimum wage in Mexico City per worker ($64.76 pesos per day in 2013), plus
1.10 per cent since 20085 (5.02% in 2000, 4.53% in 2001, 4.04% in 2002, 3.55% in 2003, 3.06%
in 2004, 2.57% in 2005, 2.08% in 2006 and 1.59% in 2007) of the employee’s monthly earnings
in excess of three times the monthly minimum wage in Mexico City, plus 1.75 per cent of the
employee’s monthly earnings.
2.
For disability and life insurance, 1.75 per cent of worker’s monthly earnings.
3.
For social services and nursery, 1 per cent of worker’s monthly earnings.
4.
Work injury contributions are a variable percentage of the worker’s monthly earnings. The
amount depends on the risk level in which the company is classified. The weighted average risk
premium is 1.98 per cent and it was calculated based on the information of every economic sector
included in the AW estimation.
Employee’s monthly earnings include wages and fringe benefits such as food vouchers and housing
benefits. For reporting purposes, all rates applied over the employee’s monthly wage (with a single ceiling
of 25 minimum wages of Mexico City starting in 2008) were added into a single rate of 6.48 per cent.
Social security contributions paid by the employer are capped at $4.070 MXN in 2013 for employees
earning an amount equivalent to 25 monthly minimum wages in Mexico City or more. They were capped
at $4,080 in 2000, $4,240 in 2001, $4,322 pesos in 2002, $3,704 in 2003, $3,724 in 2004, $3,349 in 2005,
$3,358 in 2006, $3,361 in 2007, $3,329 in 2008 $3,469 in 2009,3,637 in 2010, $3,787 in 2011 and $3,917
MXN in 2012.
III.2. NETHERLANDS
The social security contributions for employers:
4 This rate increased 0.65 percentage points on an annual basis. As from 2008, the applicable rate is 20.40 per cent
5 This rate decreased 0.49 percentage points on an annual basis. As from 2008, the applicable rate is 1.1 per cent.
97
1.
Unemployment
A percentage of the gross earnings between a threshold and a ceiling for the general
unemployment fund.
 1,70% between EUR 17,501 and EUR 50,853 in 2013
 4.55% between EUR 17,229 and EUR 50,064 in 2012
 4.20% between EUR 16,965 and EUR 49,297 in 2011
 4.20% between EUR 16,704 and EUR 48,716 in 2010

4,15 per cent between EUR 16 443 and EUR 47 802 in 2009
 4,75 per cent between EUR 15 921 and EUR 46 205 in 2008
 4,40 per cent between EUR 15 660 and EUR 45 017 in 2007
 3,45 per cent between EUR 15 138 and EUR
2.45 per cent between EUR 15 080 and EUR 43 587 in 2005
43
848
in
2006
 1.55 per cent between EUR 15 196 and EUR 43 578 in 2004
 1.55 per cent between EUR 14 877 and EUR 43 065 in 2003
 3.6 per cent between EUR 14 486 and EUR 41 499 in 2002
 3.65 per cent between NLG 30 537 and NLG 87 957 in 2001
 - 3.75 per cent between NLG 28 972 and NLG 83 259 in 2000
A percentage of the gross earnings below a ceiling for the industrial insurance associations
redundancy payments fund.
 3,26 per cent of gross earnings below EUR 50,853 in 2013
 2.77 per cent of gross earnings below EUR 50,064 in 2012
 2.24 per cent of gross earnings below EUR 49,297 in 2011
 1.82 per cent of gross earnings below EUR 48,716 in 2010
 1.41 per cent of gross earnings below EUR 47 802 in 2009
 1.36 per cent of gross earnings below EUR 46 205 in 2008
 1.27 per cent of gross earnings below EUR 45 017 in 2007
 1.48 per cent of gross earnings below EUR 43 848 in 2006
98
 1.75 per cent of gross earnings below EUR 43 587 in 2005
 1.89 per cent of gross earnings below EUR 43 578 in 2004
 1.3 per cent of gross earnings below EUR 43 065 in 2003
 0.89 per cent of gross earnings below EUR 41 499 in 2002
 0.72 per cent of gross earnings below NLG 87 957 in 2001
 1.05 per cent of gross earnings below NLG 83 259 in 2000
2.
Invalidity
A percentage of gross earnings below a ceiling.
 5,19 per cent below EUR 50,853 in 2013
 5.6 per cent below EUR 50,064 in 2012
 5.72 per cent below EUR 49,297 in 2011
 6.36 per cent below EUR 48,716 in 2010
 6.32 per cent below EUR 47 802 in 2009

6.37 per cent below EUR 46 205 in 2008
 6.38 per cent below EUR 45 017 in 2007
 6.38 per cent below EUR 43 848 in 2006
 7.25 per cent below EUR 43 587 in 2005
 7.65 per cent below EUR 43 578 in 2004
 7.4 per cent below EUR 43 065 in 2003
 7.85 per cent below EUR 41 499 in 2002
 7.7 per cent below NLG 87 957 in 2001
 7.7 per cent below NLG 83 259 in 2000
3.
Public insurance for medical care
Public insurance for medical care has been reformed in 2006. A new standard health insurance system
is introduced. In 2006, all individuals above the age of 18 years are obliged to insure themselves at a
private insurance company. Individuals pay a nominal premium to a private insurance company for the
basic health insurance of on average EUR 1,250 (in year 2013) and in addition employers pay a percentage
(7.75 per cent) of gross income net of employees’ pension premiums and unemployment social security
99
contribution until a maximum of EUR 50,853 . This system has changed in 2013. Before, employees had
to pay this income dependent contribution and were reimbursed for it by their employers. This
reimbursement was added to the taxable income of the employee.
III.2. NORWAY
The rates are regionally differentiated according to five regional zones, with rates ranging from 0 in
the northernmost part to 14.1 per cent in the most central areas.
From July 1 2001 until December 31 2006 the employer’s SSC was reduced by 4 percentage points
for most employees above 62 years (although not below zero).
III.2. POLAND
The rates of social security contributions for employers are:

old-age pension insurance contribution - 9.76 %

disability pension insurance contribiution - 6.5 % (from February 2012), 4,5 % (2008-January
2012), 6,5 % (1999-2007),

work accident insurance contribiution (the rate varies across industries) - 0.4 % – 8.12% (rate
used for calculation - 1.62%)

contributions to Labour Fund - 2.45 % (from 1999), 3% (years 1993-1998), 2% (years 19901992),

contribution to Benefits Guarantee Fund - 0.1% (from year 2006), 0.15% (years 2003-2005),
0.08% (years 1999-2002), 0.15% (1998), 0.18 (1997), 0.5% (from 1.03.1996 to 12.1996), 0.2%
(from 1.03.1995 to 29.02.1996), 0.5% (from 2.04.1994 to 28.02.1995), 1% (from 1.01.1994 to
1.04.1994).
Base of assessment of these contributions is revenue as defined in Act on personal income tax (which
is approximately the same as gross wage).
The ceiling to contributions (old-age, disability) and pensionable earning is set at 2.5 times average
earnings projected for a given year in the state budget law. It is 11 390 PLN in 2013.
The above describedd system concerning social insurance (i.e. old-age pension, disability pension and
work accident insurance contributions) was introduced in 1999. Previously – the social contributions were
paid only by employers, base of assessment of contributions was payroll and rates of contributions were:
45% (years 1990-1998), 38% (years 1987-1989), 33% (from 1.07.1982 to 31.12.1986), 25% (from
1.01.1981 – 30.06.1983).
Contribution to Labour Fund (from1990) and Benefits Guarantee Fund (from1994) were also paid.
III.2. SLOVAK REPUBLIC
There is both a minimum (only for full-time employees) and a maximum contribution, defined by the
minimum base (the value given in the column for the lower threshold in the table) and the upper threshold.
The thresholds are the same as for employee social security contributions. See explanation to Table III.1
100
for further details. The same changes to upper thresholds are valid as for employees as from 2011and 2013
onwards.
For the purposes of this table, the social insurance contribution rate for employers for 2005 onwards is
assumed to be 25.2 per cent, in addition to a 10 per cent health insurance contribution. The social insurance
rate reflects contributions to sickness insurance (1.4 per cent), disability insurance (3 per cent), retirement
insurance (14 per cent), the Guarantee fund (0.25 per cent), accident insurance (0,8 per cent), for
unemployment (1 percent) and to the Reserve fund (4.75 per cent).
From January 2005, Slovakia has introduced the privately managed fully funded pillar. This means that a
given proportion (9 percentage points) of social contributions paid by the employer for retirement
insurance flows directly to the private pension funds and not to the Social insurance Agency as in
previous years. As from September 2012 pension sharing scheme has been changed. Employer’s
retirement contribution rate to the fully funded pillar (II .pillar) has been reduced from 9 per cent to 4 per
cent (for more see pension contribution sharing table below).SSC: Pension - contribution sharing in
case of II. pillar participation
Percentage of gross earnings
Period
Previous system (up to September 2012)
Current system (from September 2012)*
I Pillar
II Pillar
9% (5% employer + 4% employee
contribution)
14% (10% employer + 4%
employee contribution)
9% (employer
contribution)
4% (employer
contribution)
Total
18%
18%
* As from 2017 contribution rate to the II. pillar will automatically increase by 0.25 p.p. per year (i.e. contribution rate to the I. pillar will decrease in the same
volume)
III.2. SLOVENIA
The compulsory social security insurance system consists of four schemes as follows:




pension and disability insurance;
health insurance;
unemployment insurance;
maternity leave insurance.
The taxable base for social security insurance contributions paid by employers is the total amount of the
gross wage or salary including vacation payments, fringe benefits and remuneration of expenses related to
work above a certain threshold. The assessment period is the calendar month. Employers contribute an
amount as a percentage of their remuneration as follows.
Scheme name
Rate of contribution
(%)
101
Pension insurance
8.85
Health insurance
7.09
Unemployment insurance
0.06
Maternity leave
0.10
Total
16.10
III.2. SPAIN
The tax rate is the percentage applied to the tax base. Tax rates are fixed every year by the General
Budget Law.
For 2013 the rates applied for employees are the following:
General Benefits Fund
Unemployment (general rate)
Unemployment (fixed duration – full time)
Unemployment (fixed time – part time)
Wage Guarantee Fund
Professional Training
Employees
4.70%
1.55%
1.60%
1.60%
0.1%
III.2. SWEDEN
The employers’ social security contribution is based on the sum of wages and other payments for
labour, including also sick pay paid by the employer. In certain regions, a reduction of 10 per cent of the
base, maximum SEK 7 100 per month, is granted. On premiums for occupational pensions paid by the
employer a reduced SSC rate (24.26 per cent) is applied. For employees under the age of 26 a reduced SSC
rate of 15.49 per cent is applied. For employees who are over 65 years old and born after 1937 only the old
age pension contribution (10.21 per cent) is applicable. For persons born in 1937 or earlier no employers’
social security contributions are applied.
III.2. UNITED KINGDOM
Employers pay Class 1 secondary contributions equal to 12.8 per cent of earnings above the
secondary threshold (ST, £110 per week in 2010-11).
There is a contracted-out rebate for secondary contributions of 3.7 per cent of earnings between the
lower earnings limit (LEL, £97 pw in 2010-11) and the upper accruals point (UAP, £770 pw fixed from
2008-09 onwards) for contracted-out salary related schemes and 1.4 per cent for contracted-out money
purchase schemes. An additional age-related rebate is paid directly to the scheme in the following tax year
for money purchase schemes. For appropriate personal pensions and stakeholder pensions, the employer
pays contributions at the standard not contracted-out rate and an age and earnings related rebate is paid
directly to the personal pension provider in the following tax year.
102
From 1981-82 the structure for employer’s contributions was as follows:
Lower limit of
earnings (£)
Year
1981-82
1982-83
1983-84
1984-85
27.00
29.50
32.50
34.00
Upper limit of
earnings (£)
200
220
235
250
Not contracted-out
rate payable on all
earnings (%)
10.20
10.20
10.45
10.45
Contracted-out rate
payable on all
earnings (%)
5.70
5.70
6.35
6.35
The UEL for employer’s contributions was removed in 1985. The structure changed mid way through
the year so rates between October 1985 and April 1986 are not given in table III.2. They were as follows.
Weekly income (£)
0-35.50
35.50-55
55-90
90-130
> 130
Employer’s contribution rate payable on all earnings (%)
0
5.00
7.00
9.00
10.45
In addition national insurance surcharge (NIS) was payable by most employers (excluding charities)
up to 1st October 1984 (6th April 1985 for local authorities). NIS was levied on employees’ gross earnings
on exactly the same basis as employer’s NICs. The rates of NIS were 3.5 %, 2% and 1% from October
1978, August 1982 and April 1983 respectively. At the end of 1982-83 a rebate was made to employers.
This reduced the effective rate of NIS for the year as a whole to 2 per cent.
The structure changed in April 1999 when the multiple rates were replaced by a single rate charged
above the secondary threshold. This structure has remained unchanged to date, but the rate has changed
from 12.20 per cent in 1999-00, 11.9 per cent in 2001-02, 11.8 per cent in 2002-03 and increasing to 12.8
per cent from 2003-04 onwards.
.
III.2 UNITED STATES
Starting in July 2011 the federal unemployment tax was reduced from 6.2 per cent to 6.0 per cent of
wages up to USD 7 000. Taxes are also paid to various state-sponsored unemployment plans which are
creditable against the federal tax (up to a maximum of 5.4 per cent of taxable wages).
The federal tax rate 6.2 per cent of earnings up to USD 113,700 in 2013 for old age, survivors, and
disability insurance and 1.45 percent of earnings without limit for old age hospital insurance.
Part III, Table 3
III.3. AUSTRIA
The table shows the rates for most self-employed. The rates are lower for farmers. Some groups (e.g.
medical doctors, lawyers) have a different social security system, where the base is the (adjusted) taxable
profits two years earlier.
III.3. BELGIUM
The social contribution is calculated on the inflation-adjusted net earned income realised three years
before. There is a minimum and a maximum. Up to 2002 the income of the reference year was first grossed
103
up with the theoretical value of the social contribution due on such income according to the rate schedule
of the reference year. Then this grossed up income was inflation adjusted and finally the social contribution
was calculated (with a different marginal rate and additional fixed amount (lump sum) for each income
bracket). From 2003 onwards, the marginal rates were increased but the grossing up and the additional
fixed amounts were abolished.
Contribution year
(and reference year)
2013 (2010)
2012 (2009)
2011 (2008)
2010 (2007)
2009 (2006)
2008 (2005)
2007 (2004)
2006 (2003)
2005 (2002)
2004 (2001)
2003 (2000)
2002 (1999)
2001 (1998)
2000 (1997)
Adjustment coefficient
Minimum (euros; on yearly basis)
Maximum (euros; on yearly basis)
1.0914513
1.0950350
1.0537941
1.0734670
1.0929874
1.0745475
1.0779395
1.0860889
1.0674172
1.0522912
1.0612037
1.0688421 (*)
1.0609871 (*)
1.0368237 (*)
2 822.72
2 771.44
2 668.56
2 601.36
2 601.36
2 512.49
1 924.32
1 899.08
1 837.20
1 781.88
1 753.62
1 721.11
1 689.57 (68 157 BEF)
1 635.47 (65 975 BEF)
15 905.30
15 616.25
15 036.50
14 657.95
14 657.95
14 157.17
12 607.56
12 422.28
12 036.76
11 674.20
11 489.17
11 251.91
10 716,70 (445 527 BEF)
10 692.69 (431 342 BEF)
(*) applicable on grossed up income of the reference year
III.3. CANADA
In 2000, self-employed individuals received a non-refundable income tax credit of 17 per cent for
contributions made to C/QPP.
Effective from 2001, 50 per cent of contributions to C/QPP by self-employed individuals are
deductible from income for purposes of determining taxable income. Self-employed individuals receive a
non-refundable income tax credit for the other 50 per cent of contributions made to C/QPP. In 2004, 2003,
2002 and 2001 the federal credit was 16 per cent of the contributions eligible for the tax credit (i.e., the 50
per cent not deducted). In 2005 the federal credit was 15 per cent, in 2006 it was 15.25 per cent and in
2012, 2011, 2010, 2009, 2008 and 2007 it was 15 per cent of the eligible contributions. The federal credit
rate for 2013 is 15 per cent. The provinces and territories also provide non-refundable income tax credits at
rates which approximate their lowest personal income tax rate.
Self-employed individuals generally do not contribute to EI. However, self-employed individuals
can contribute to EI to access some special benefits. There are four types of EI special benefits for
self-employed individuals: maternity benefits, parental benefits, sickness benefits and
compassionate care benefits. The contribution rates and amounts are the same as those paid by
employees.
III.3. CHILE
At present, the self-employed are not obligated to pay social security contributions. However they are
able to make some types of contribution on a voluntary basis - health care; retirement pension; and
insurance against employment accidents and occupational diseases using the same rates of contribution
applicable to employees. These voluntary contributions are paid to the private sector and are therefore not
classified as taxes.
Looking to the future following the Law of Provisional Reform, promulgated on March 2008, the selfemployed will be liable to pay the contributions for retirement pension and insurance against employment
104
accidents and occupational diseases from 2012 (During 2012, 2013 and 2014 the self-employed can choose
not to pay this contribution, but from 2015 it would be compulsory.), and the contributions for health care
from 2018. The health care contributions paid to FONASA will be classified as tax revenues according to
the OECD Interpretative Guide, but the other payments which will be made to private funds will not.
III.3. CZECH REPUBLIC
The rates of social security contributions for self-employed are:
self-employed
pension
insurance
contributions
sickness
insurance
contributions
28 %
Voluntary 2.3%
((increase from 1.4
contributions to
state
employment
policy
1.2 %
health insurance
contributions
Total
13.5 %
42.7 %
%)
For the year 2000-2003, the tax base for SSC of self-employed is 35% of their gross annual profit.
Then the rate of 43.1% is applied (sum of social and health contributions rates, which is equal to the sum
of percentages that employer and employee pay from employee’s gross wage but the sickness insurance is
voluntary for self-employed and thus not classified as a tax). The effective rate is thus 15.09% in 20002003 (43.1% x 0.35). There is a cap of the base of 486 000 CZK. When the rate of 43.1% is applied to this
threshold, the maximum contribution is 209 466 CZK.
For 2004, the tax base for SSC of self-employed is 40% of their gross annual profit and it increased to
45% in 2005. The effective rates are thus 17.24 in 2004 (43.1% x 0.4) and 19.40% in 2005 (43.1% x 0.45).
Since 2006 the tax base for SSC of self-employed is 50% of their gross annual profit. The effective rate is
21.55% in 2006 (43.1% x 0.5). The same effective rate is in 2007 and 2008. The effective rate for the year
2011 is 21,35% (42.7% x 0.5).
III.3. GERMANY
In the past, the self-employed people were not generally obliged to pay social security contributions.
As from 1 January 2009, health insurance (including long-term care insurance) is mandatory for all citizens
and permanent residents in Germany. The self-employed therefore need to be covered either by statutory
health insurance or by private health insurance. Depending on certain conditions, their membership in
statutory health insurance may be compulsory or voluntary. Otherwise, they have to contract with a private
health insurance company.
Furthermore, specific groups of self-employed are obliged to contribute to statutory pension insurance
for at least 18 years (e. g. skilled craftsmen mandatorily organised in professional chambers). Members of
the so-called ‘liberal professions’ (e. g. lawyers, physicians, engineers, architects) are compulsorily insured
within special pension insurance schemes of the respective chambers they belong to. On certain conditions,
self-employed artists and members of the publishing professions are obliged to pay contributions under the
Artists Social Welfare Act, whereas farmers are mandatorily insured in the ‘Farmers’ Pension Fund’.
III.3. GREECE
Self-employed persons, such as craftsmen, retailers, professional motorists, hotel owners etc. are
compulsory insured with the Social Security Organisation for the Self-Employed-“O.A.E.E.” which is a
105
fund that resulted from the merger of the former funds TEVE, TAE, TSA, TANPY, TPX and TPEAPI
Fund. Certain other professional categories, such as medical personnel, doctors, pharmatists, engineers,
lawyers, notaries etc. are compulsory insured with the Insurance Fund for Independent Professionals“ETAA”.Social security contributions to O.A.E.E. are not related to the level of gross earnings. Instead
they are monthly charges depending on the years of insurance. There are fourteen (14) insurance categories
and classification to the different existing insurance categories is automatically made and depends on the
obligatory time spent in each one of them. The first 10 insurance categories are obligatory and the next 4
are optional.
Starting 1.1.2007 onwards the fourteen insurance categories apply to all individuals regardless of the
date they were first insured (before or after 1.1.1993).
A newly insured individual is enrolled in the 1st class and every 3 years changes over to the next
obligatory category. An individual can pay extra contribution if he wants (more than that required by his
insurance category), by changing over to a higher category. In that case he has to petition.
According to the insurance category the relevant contributions are calculated as following:

The contribution for the pension branch is 20% of the category amount, paid by the insured,
while especially for those first insured after 01/01/1993 the State contributes another 10%

The contribution for the sickness branch is 7.65% of the category amount for those first insured
after 01/01/1993 the State contributes another 3.8% of the category amount. The insured before
01/01/1993 contribute a flat rate of 92.79 euro, regardless of their insurance category
Insurance categories of OAEE and the social security contributions that are based on them are
illustrated in the table underneath:
Insurance
Category
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Category Amount as
of 01/01/2011
762.04
930.71
1111.02
1212.92
1399.06
1577.93
1687.28
1824.48
1947.75
2071.08
2194.35
2317.62
2440.96
2564.24
Amounts of
Contribution for
Pension Branch
(20%)
152.41
186.14
222.20
242.58
279.81
315.59
337.46
364.90
389.55
414.22
438.87
463.52
488.19
512.85
Amount of Contribution for Sickness Branch
First insured after 1-11993 (7.65%)
58.30
71.20
84.99
92.79
107.03
120.71
129.08
139.57
149.00
158.44
167.87
177.30
186.73
196.16
First insured before
1-1-1993
92,79
92,79
92,79
92.79
92.79
92.79
92.79
92.79
92.79
92.79
92.79
92.79
92.79
92.79
106
Note: Categories valid from 1.1.2011 onwards according to Decree-Law 32/2011. Contributions for pension branch: 20% of the
category amount; contributions for sickness branch: 7.65% of the category amount.
III.3. IRELAND
In 2002, the threshold only applies to the social insurance element (i.e., 5 per cent).
III.3. ISRAEL
Social security contributions for the self-employed are made up of a combination of those for National
Insurance and Health Insurance. See the corresponding note for Table III.1 Employee social security
contributions for the general background.
A reduced rate applies up to a lower threshold of 50% the average wage per employee post (raised to
60% the average wage per employee post in January 2006). Until June 2002 the regular rate applied up to a
upper threshold of around 4 times the average wage per employee post (and an extra rate applied between
4 times and 5 times the average wage per employee post) The upper threshold was removed between July
2002 and June 2003. In July 2003 the upper threshold was re-instated at a level of 5 times the average
wage per employee post. In August 2009 it was increased to 10 times the average wage per employee post.
In January 2011 and in January 2012 it was decreased to 9 times and then 5 times the average wage per
employee post respectively.
The following table shows the historical tax rates and thresholds:
Period
Jan2000-Dec2000
Jan2001-Dec2001
Jan2002-Mar2002
Apr2002-Jun2002
Jul2002-Dec2002
Jan2003-Jun2003
Jul2003-Dec2005
Jan2006-Dec2006
Jan2007-Dec2007
Jan2008-Dec2008
Jan2009-Jul2009
Aug2009-Dec2009
Jan2010-Dec2010
Jan2011-Dec2011
Jan2012-Dec2012
Jan2013-Dec2013
Reduced Lower
rate
threshold
8.82
3,174
8.82
3,482
8.82
3,525
8.82
3,482
9.82
3,482
9.82
3,482
9.82
3,482
9.82
4,430
9.82
4,522
9.82
4,598
9.82
4,757
9.82
4,757
9.82
4,809
9.82
4,984
9.82
5,171
9.82
5,297
Regular
rate
14.42
14.42
14.42
14.42
15.42
15.42
15.42
16.23
16.23
16.23
16.23
16.23
16.23
16.23
16.23
16.23
Upper
threshold
25,388
27,856
28,200
27,856
No limit
No limit
34,820
35,760
35,760
36,760
38,415
76,830
79,750
73,422
41,850
42,435
Extra rate
9.55
9.55
9.55
9.55
Additional
threshold
31,735
34,820
35,250
34,820
The 2031 full and reduced rate of contributions for the self-employed and their breakdown into those
applying to the Health insurance and the National Insurance branches are set out below. These figures have
applied since the beginning of 2006.
107
Branch
Full rate
Reduced rate
contribution
contribution
(%)
(%)
Insurance branches
11.23
6.72
Health
5.00
3.10
Total contributions
16.23
9.82
III.3. ITALY
Self-employed workers register in public bodies (about sixteen) involved to collect and manage social
contributions. There are different bodies for different types of activity (commercial experts, land surveyors,
engineers, physicians, journalists, lawyers, actors, chemists etc.).
Each body fixes the minimum charge to be paid by the member and the rates to be applied to his
declared gross taxable income. Among these bodies INPS (Istituto Nazionale di Previdenza Sociale) counts
the largest number of registered workers who belong to the categories of artisans and traders.
Social security contributions vary with age and with the level of taxable business income as illustrated
in the following table.
Furthermore, for employees who have begun to pay contributions after the 1995 the maximum
contribution undergoes an increase of about 30%.
Year
2000
2001
2002
2003
2004
Taxable income
0 - £ 22,688,224
£ 22,688,224 - £ 66,324,000
£66,324,001 - £ 110,540.000
£ 110,540,000 and over
0 - £ 22,243,896
£ 22,243,896 - £ 68,048,000
£68,048,001 - £ 113,413,333
£ 113,413,333 and over
0 - € 12,312.00
€ 12,312.00 - € 36,093.00
€ 36,093.01 - € 60,155.00
€ 60,155.00 and over
0 - € 12,590.00
€ 12,590.00 - € 36,659.00
€ 36,659.01 - € 61,598.00
€ 61,598.00 and over
0 - € 12,889.00
€ 12,889.00 - € 37,883.00
€ 37,883.01 - € 63,138.00
€ 63,138.00 and over
Artisans
Under 21 years
Over 21 years
£ 3,009,845
£ 3,692,210
13.20 %
16.20 %
14.20 %
17.20 %
£ 15,048,439
£ 18,366,358
£ 3,129,682
£ 3,826,,500
13.40 %
16.40 %
14.40 %
17.40 %
£ 15,666,040
£ 19,067,941
€ 1,681.87
€ 2,051.28
13.60 %
16.60 %
14.60 %
17.60 %
€ 8,429.14
€ 10,233.84
€ 1,744.86
€ 2,122.56
13.80 %
16.80 %
14.80 %
17.80 %
€ 8,754.35
€ 10,602.29
€ 1,811.95
€ 2,198.62
14.00 %
17.00 %
15.00 %
18.00 %
€ 9,099.36
€ 10,993.50
Traders
Under 21 years
Over 21 years
£ 3,098,329
£ 3,780,694
13.59 %
16.59 %
14.59 %
17.59 %
£ 15,479,545
£ 18,797,463
£ 3,199,414
£ 3,896,232
13.70 %
16.70 %
14.70
17.70 %
£ 16,006,280
£ 19,408,181
€ 1,729.89
€ 2,099.25
13.99 %
16.99 %
14.99 %
17.99 %
€ 8,663.75
€ 10,468.40
€ 1,793.96
€ 2,171.64
14.19 %
17.19%
15.19 %
18.19 %
€ 8,994.59
€ 10,842.51
€ 1,862.22
€ 1,991.11
14.39 %
17.39%
15.39 %
18.39 %
€ 9,093.05
€ 10,981.96
108
0 - € 13,133.00
€ 13,133.00 - € 38,641.00
€ 38,641.00 - € 64,402.00
€ 64,402.00 and over
0 - € 13,345.00
€ 13,345.00 - € 39,297.00
€ 39,297.00 - € 65,495.00
€ 65,495.00 and over
0 - € 13,598.00
€ 13,598.00 - € 40,083.00
€ 40,083.00 - € 66,805.00
€ 66,805.00 and over
0 - € 13,819.00
€ 13,819.00 - € 40,765.00
€ 40,765.00 - € 67,942.00
€ 67,942.00 and over
0 - € 14,240.00
€ 14,240.00 - € 42,069.00
€ 42,069.00 - € 70,115.00
€ 70,115.00 and over
0 - € 14,334.00
€ 14,334.00- € 42,364.00
€ 42,364.00 - € 70,607.00
€ 70,607.00 and over
0 - € 14,552.00
€ 14,552.00- € 43,042.00
€ 43,042.00 - € 71,737.00
€ 71,737.00 and over
0 - € 14,930.00
€ 14,930.00- € 44,204.00
€ 44,204.00 - € 73,673.00
€ 73,673.00 and over
0 - € 15,357.00
€ 15,357.00- € 45,530.00
€ 45,530.00 - € 75,883.00
€ 73,883.00 and over
2005
2006
2007
2008
2009
2010
2011
2012
2013
€ 1,864.89
14.20 %
15.20 %
€ 9,402.69
€ 1,921.68
14.40 %
15.40 %
€ 9,693.26
€ 2,243.67
16.50 %
17.50 %
€ 11,290,05
€ 2,349.23
17.00 %
18.00 %
€ 11,821.91
€ 2,428.24
17.00 %
18.00 %
€ 12,200.00
€ 2,444.22
17.00 %
18.00 %
€ 12,285.62
€ 2,481.28
17.00 %
18.00 %
€ 12,482.24
€ 2,739.63
18.30 %
19.30 %
€ 13,776.85
€ 2,886.88
18.75%
19.75 %
€ 15,531.59
€ 2,258.88
17.20 %
18.20 %
€ 11,334.75
€ 2,322.03
17.40 %
18.40 %
€ 11,658.11
€ 2,651.61
19.50 %
20.50 %
€ 13,294.20
€ 2,763.80
20.00 %
21.00 %
€ 13,860.17
€ 2,855.44
20.00 %
21.00 %
€ 14,303.46
€ 2,874.24
20.00 %
21.00 %
€ 14,403.83
€ 2,917.84
20.00 %
21.00 %
€ 14,634.35
€ 3,187.53
21.30 %
22.30 %
€ 15,987.09
€ 3,347.59
21.75 %
22.75 %
€ 16,808.08
€ 1,916.10
14.59 %
15.59 %
€ 9,653.86
€ 1,973.73
14.79 %
15.79 %
€ 9,948.69
€ 2,255.91
16.59 %
17.59 %
€ 11,350.17
€ 2,361.66
17.09 %
18.09 %
€ 11,883.00
€ 2,441.06
17.09 %
18.09 %
€ 12,263.11
€ 2,457.12
17.09 %
18.09 %
€ 12,349.17
€ 2,494.38
17.09 %
18.09 %
€ 12,546.80
€ 2,753.07
18.39 %
19.39 %
€ 13,843.15
€ 2,900.70
18.84 %
19.84 %
€ 15,599.89
€ 2,310.09
17.59%
18.59 %
€ 11,585.92
€ 2,374.08
17.79%
18.79 %
€ 11,913.54
€ 2,663.85
19.59%
20.59 %
€ 13,354.32
€ 2,776.24
20.09%
21.09 %
€ 13,921.32
€ 2,868.26
20.09%
21.09 %
€ 14,366.56
€ 2,887.14
20.09%
21.09 %
€ 14,467.38
€ 2,930.94
20.09%
21.09 %
€ 14,698.91
€ 3,200.96
21.39 %
22.39 %
€ 16,053.34
€ 3,361.41
21.84 %
22.84 %
€ 16,876.38
III.3. KOREA
Since the medical insurance premium of the self-employed is charged in the fixed amount depending
on their income and properties, the medical insurance premium is not assessed on the basis of rate. So, the
medical insurance premium is not included in the marginal rate of self-employed social securities
contribution rates shown in the table.
The national pension rate of the self-employed will be increased gradually from 3 per cent to 9 per
cent during the period 2000-2005.
III.3. MEXICO
Self-employed individuals have 2 voluntary options: either to comply with the general regime or to
pay only for the family health insurance.
1.
In the first case, the individual will pay for sickness, maternity, disability and life insurance. The
contribution is a fixed rate based on the annual minimum legal wage in Mexico City. The
following table summarises these payments.
109
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Types of insurance
Sickness and maternity
Disability and life
$2,334.3
$349.8
$2,538.5
$365.4
$2,732.4
$378.4
$2,939.2
$392.2
$3,151.6
$405.7
$3,393.0
$421.9
$3,645.5
$438.4
$3,915.9
$455.9
$4,080.4
$475.0
$4,278.5
$498.1
$4,454.2
$518.6
$4,641.1
$540.3
$4,822.0
$561.4
Total
$2,684.1
$2,903.9
$3,110.8
$3,331.4
$3,557.3
$3,814.9
$4,083.9
$4,371.8
$4,555.4
$4,776.6
$4,972.8
$5,181.4
$5,383.4
Fixed Annual Fee (Mexican pesos)
The base in all cases is equal to the annual minimum wage in Mexico City ($64.76 pesos per day in
2013). In this option the family of the individual receives the covered social security benefits under this
regime. The self-employed must in this case also pay for the retirement, discharge and old age insurance;
however these contributions are not included since they are privately managed (AFORES).
2. Under the second option (the family health insurance option), individuals must pay a fixed annual
fee that depends on the number and age of the family members as of 2002:
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Fixed annual fee in pesos by age category
0 to 19
20 to 39
40 to 59
60 or more
$889
$1,039
$1,553
$2,337
$940
$1,098
$1,642
$2,470
$977
$1,142
$1,707
$2,568
$1,028
$1,201
$1,796
$2,701
$1,062
$1,241
$1,856
$2,791
$1,105
$1,291
$1,931
$2,904
$1,147
$1,340
$2,004
$3,013
$1,222
$1,427
$2,135
$3,210
$1,266
$1,478
$2,211
$3,325
$1,322
$1,543
$2,308
$3,471
$1,372
$1,602
$2,396
$3,604
$1,421
$1,659
$2,481
$3,733
Each relative must pay the corresponding annual fee in accordance to the age group he/she belongs to.
For OECD Tax Database purposes, this annual fee was calculated for the average Mexican family that
consists of the self-employed worker, his spouse and two children.
In 2001 and 2000 the Social Security Law applied a different methodology for the estimation of this
second option of family health insurance: the annual fee was 22.4 per cent of the annual minimum wage in
Mexico City, and each additional relative paid 65 per cent of the previous amount.
A third option can be applied. Under this option an individual who has made at least 52 weekly
contributions to the social security system during the previous five years and leaves his/her job can
maintain the insurance as long as he/she continues paying her contributions according to the last salary
base.
110
III.3. NDS
Social security contributions by self-employed:
1.
Invalidity
In august 2004 invalidity contributions by self-employed people was abolished. Self-employed
people designated to private insurance companies. In 2000-2003, it was calculated as a
percentage (8.8 per cent) of gross earnings (profits) between a threshold (EUR 13 160 for 2002
and 2003, equivalent to NLG 29 000 in 2000 and 2001) and a ceiling (EUR 38 118 for 2002 and
2003, equivalent NLG 84 000 in 2000 and 2001).
2.
Public insurance for medical care (social health plan).
Public insurance for medical care has been reformed in 2006. A new standard health insurance system
was introduced (see Part III Table 1). From 2006, all individuals above the age of 18 years are obliged to
insure themselves at a private insurance company. This system is also applicable to self-employed.
Individuals pay a nominal premium to a private insurance company for the basic health insurance of on
average EUR 1,250 (in 2013). In addition self-employed pay an income depended contribution of
percentage (5,65 per cent) (i.e 2,10 per cent lower than the employer contribution fot his/her employee) of
taxable profits until a maximum of EUR 50853.
Taxpayers including self-employed might obtain compensation for the private nominal contribution of
EUR 1,250, depending on the taxpayer’s personal situation and gross income. This is called the care
benefit. The care benefit is calculated as follows for 2013:
 household of one adult : 1483 (med_adult for care benefit) – 2.195 per cent
(med_compensation 1) * 18,509 (med_key) – 8.713 per cent (med_compensation 2) *
(taxable income – 18,509 (med_key)).
 household of more than one adult: number of adults * 1483 (med_adult for care benefit) –
4.695 per cent (med_compensation 3) * 18,509 (med_key) – 8.713 per cent
(med_compensation 4) * (taxable income – 18,509 (med_key)).
III.3. NORWAY
The social security contribution rate for the self-employed is 11 per cent of gross labour income
(including imputed labour income) from 2008 onwards.
For self-employed in primary industries (agriculture, forestry and fisheries) the SSC rate is 7.8 per
cent on all gross labour income.
III.3. POLAND
Polish social security system (applying to self-employed) consists of:

social insurance system,

health insurance,
111

Labour Fund.
Social insurance system covers:

old-age pension insurance,

disability and survivors’ pension insurance,

insurance in respect of sickness and maternity (called sickness insurance),

insurance in respect of accidents at work and occupational diseases (called work accident
insurance).
The health insurance is a system of benefits of the preventive, diagnostic, therapeutical and
rehabilitation character, provision of medicines as well as orthopaedic appliances and auxiliary means,
financed by public means.
Labour Fund finances different forms of counteracting unemployment and mitigating its effects, it
pays the unemployment benefit.
In Poland two systems of social insurence exist– for farmers and for non- farmers.
The system of social insurance of farmers is financed by contributions payable by farmers and from
the state budget allocation.
III.3. PORTUGAL
1.
Self-employed social contributions base corresponds to the monthly conventional gross earnings.
Beneficiaries have to choose the value of conventional earnings (from 1.5 times up to 12 times
the value of the national minimum wage).
2.
There is a compulsory flat rate of 29.6%.
3.
The lower limit corresponds to 1.5 times the value of the Social Benefits Index (SBI) and the
higher limit corresponds to twelve times the SBI. The maximum contribution is equal to 29.6 per
cent x 12 x SBI) and annual incomes up to 12 times the value of the SBI are exempt. However,
when the annual gross income is lower than 18 times the national minimum wage it is possible to
ask annually for the application of a base corresponding to one twelfth of the annual gross
income, with a minimum of 50% of the SBI.
III.3. SLOVAK REPUBLIC
There is both a minimum and a maximum contribution, defined by the minimum base (the value given
in the column for the lower threshold in the table) and the upper threshold. As from 2010 the minimum
base is defined as 44.2% of average wage in national economy two years prior to when the contribution is
paid. The upper thresholds are the same as for employee social security contribution.
Social insurance assessment base for the self-employed is defined as half of their tax base (before tax
allowances) in previous year. Health insurance assessment base is defined as the tax base (before
allowances) in previous year plus paid health contributions, divided by 2.14.
As from 2013 minimum assessment base for social security of self employees has been increased,
112
social security contribution will be no longer deducted from their assessment base for social security
contribution and the calculation of the assessment base for social security has been changed as well.
Minimum base has been increased to 50% of average wage in national economy two years prior to
when the contribution is paid. Social insurance assessment base is defined as the tax base (before tax
allowances) in previous year plus paid social contributions, divided by 1.9. Health insurance assessment
base is defined as the tax base (before allowances) in previous year plus paid health contributions, divided
by 1.9. It has been also legislated that both formulas for calculation of assessment bases will change in
denumerator from 1.9 in 2013 to 1.458 in 2015 (in 2014 it would be 1.6).
Self-employed are obliged to pay social insurance in the current year (year t), if their previous year’s
turnover (in year t-1) was higher than 12 x minimum assessment base. Obligation to pay these
contributions for self employed starts from 1st July in the current year (year t). Health insurance
contributions have to be paid by every self-employed person.
III.3. SLOVENIA
The compulsory social security insurance system consists of four schemes as follows:




pension and disability insurance;
health insurance;
unemployment insurance;
maternity leave insurance.
Self-employed individuals-insured persons are obliged to pay social security contributions (SSC) on the
basis of their profits (ie taxable profits minus net tax allowances). The amounts are assessed by applying
the following contribution rates.
Scheme name
Rate of contribution
(%)
Pension insurance
24.35
Health insurance
13.45
Unemployment insurance
0.20
Maternity leave
0.20
Total
38.20
113
There is an SSC base schedule (social security insurance base) which defines the insurance (contribution)
base with regard to the amount of the profit (e. taxable profits minus net tax allowances). The basis for
payments in a given year is calculated on the basis of the profits made in the previous year. The table
below describes how the basis for SSC payments in 2013 is calculated based on the profits made in 2012.
In the schedule there is defined minimum and maximum insurance (contribution) base.
Between 2000 and 2013, the minimum insurance base is defined by the annual minimum wage (a weighted
total of the pre and post August monthly levels).

If the self-employed person makes a loss or a profit that is less than the annual minimum wage, the
base is equal to the minimum wage.

If the profit is for example between annual minimum wage and annual average wage in Slovenia
(AAW), the SSC insurance base is at least at the amount of 60% of the AW. The base is set at
higher levels for profit levels higher than the average annual wage (AAW) as is described in the
table.

Since August 2005 and all the year 2013, the maximum insurance (contribution) base has been
defined as the amount of 240% of the AW when the profit level exceeds 350% of the AAW. Prior
to August 2005 the maximum contribution base was defined as the maximum pension base grossed
up by average annual rate of taxes and contributions.
Since 2014 the SSC base will be determined differently - according to the profits made in previous
year, that is reduced by 25 % (no more sorting into insurance classes). If the self-employed person will
create a loss or a profit (reduced by 25 %) that is less than the 60 % of the AW, the base will be equal to
the 60 % of the AW. The maximum insurance (contribution) base will be defined as the amount of 350 %
of the AW.
Self-employed individuals can opt to pay their SSC at a higher insurance (contribution) base than the one
calculated on the basis of their profit but no higher than the amount equal to 240% of the AW.
When the insurance (contribution) base is determined, the contributions are paid monthly from the
insurance (contribution) base applicable in the current period. For example, when the profit in 2012 has
been assessed to be between minimum and average wage, the SSC in 2013 is paid from the SSC base equal
to 60% of the average wage of the pre-previous month. This means that, for example, the average wage for
April is used to calculate the SSC base for June. The average wage is published each month and there is no
consolidation of payments on an annual basis.
INSURANCE BASE IN 2013
PROFIT THRESHOLD (2012)
INSURANCE (contribution)
BASE (2013)
Classification of the insurance base depending on
the level of profit
Lower
threshold
Upper
threshold
Minimum
wage
Over
Up to
9.156,72
Minimum wage
9.156,72
114
Minimum
wage
Average
wage
(AW)
9.156,72
18.305,64
60% of AW of the
one but pre-previous
month
10.983,38
Average
wage
(AW)
150% of
AW
18.305,65
27.458,46
90% of AW of the
one but pre- previous
month
16.475,00
150% of
AW
200% of
AW
27.458,46
36.611,28
120% of AW of the
one but pre-previous
month
21.966,77
200% of
AW
250% of
AW
36.611,28
45.764,10
150% of AW of the
one but pre- previous
month
27.458,46
250% of
AW
300% of
AW
45.764,10
54.916,92
180% of AW of the
one but pre-previous
month
32.950,15
300% of
AW
350% of
AW
54.916,92
64.069,74
210% of AW of the
one but pre-previous
month
38.441,84
240% of AW of the
one but pre-previous
month
43.933,54
350% of
AW
64.069,74
*Data in Table are shown on the annual base in Euros..
III.3. SPAIN
Self-employed Social Security Contributions are subject to a flat SSC rate applied to monthly
earnings situated between a floor and a ceiling base according to following table applied in 2013. Selfemployed may opt for a reduced SSC rate in which case they are not entitled to perceive benefits in case of
sickness.
Minimum base
858.20 €/month
Maximum base
3,425.70 €/month
Contribution base for those 47 years old in
01/01/2012
Self-employed workers who in December
2012, with a contribution base over 1,870.50
€/month or just enrolled in this scheme may
choose a contribution base between 858,20 and
3,425.70 euros/month
If the last contribution base is lower than
1,870.50 euros/month they may not choose a
contribution base over 1,888.80 euros/month,
unless they change their contribution base before
June 30th, with effect from July 1, 2013.
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If the last contribution base was less than or
equal to 1,870.50 euros/month, they may choose a
base between 858.60 and 1,888.80 euros/month
If the last contribution base is greater than or
Contribution base for those over 50 years old
equal to 1,870.50 euros/month, they may choose a
with 5 years or more of contributions
base between 858.60 euros/month and that amount
increased by 1 percent, until a base 1,888.80
euros/month.
In general, the contribution base will be
situated
between
925.80
and
1,888.80
Contribution base for those aged 48 or over in
euros/month.
01/01/2012
29.80%
SSC rate (including temporary incapacity)
29.30% in case of cessation of activity
SSC rate (no temporary incapacity)
26.50%
III.3. SWEDEN
Social security contributions of the self-employed are based on total labour income. In certain regions,
a reduction of 10 per cent of the base, maximum SEK 18 000 per year, is granted. The self-employed can
opt for a reduced rate in which case they will receive less generous sick pay. On premiums for
occupational pensions paid by the employer a reduced SSC rate (24.26 per cent) is applied. For selfemployed under the age of 26 a reduced SSC rate of 14.88 per cent is applied. For self-employed who are
over 65 years old and born after 1937 only the old age pension contribution (10.21 per cent) is applicable.
For self-employed persons born in 1937 or earlier no social security contributions are applied. Self
employed aged between 26 and 64 are entitled to a reduction of their social security contributions with 5
percentage points, up to a maximum of SEK 10 000 per year.
III.3. TURKEY
In the calculation of the premium paid by the self-employed people, an income scale with twenty-four
steps is used. In this scale, the indicator is calculated by multiplying the indicator of each step with the civil
servant’s wage bracket (it is increased twice a year in January and in July.) 20% of this amount is paid as
monthly premium (contribution) and 20% of it is paid as health premium (the health premium of the first
eight steps is the same as the health premium of the eighth step). The income steps in the income scale are
determined in April by being increased at first according to the last base year urban places consumer prices
index change rate announced by State Institute of Statistics in respect of the December of the last year and
the December of the previous year, secondly according to the development rate of gross domestic product
of last year with constant prices. This income scale does not have a connection or a proportion with the real
income of the self-employed and the at the beginning the insured person chooses what he likes from the
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first twelve steps of this income steps. Up to the first twelve steps, steps are taken automatically, but from
the twelfth step to the twenty-fourth steps are taken bi annual in case the insured person so demands.
III.3. UNITED KINGDOM
Self-employed individuals pay two distinct categories of contributions:
Class 2 contributions are flat-rate payments (£2.40 pw in 2009-10) payable by all self-employed
people over 16 unless they have applied for the small earnings exception (£5 075 per annum in 2009-10).
Class 4 contributions are earnings-related payments which are paid if profits exceed a lower threshold.
They are a percentage rate of the earnings (8 per cent) between the Upper Profits Limit (UPL - £43 875 in
2009-10) and Lower Profits Limit (LPL - £5 715 in 2009-10) limits. Profits above the UPL contribute at a
rate of 1 per cent.
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