Average tax rates - VAT - EUROMOD estimates
The table shows VAT weighted average rates (WAR), a component for the Own Resources calculation of the EU, offered by decile groups, for those at risk of poverty (poor) and for the whole population (all). They are computed as the sum of VAT liabilities paid by the corresponding population group divided by the sum of (net-of-VAT) non-exempted expenditures of that population group. Formally, for each group:
WAR = ΣcVATcNA / Σc(EXPcNA - VATcNA)
where:
- c is any consumption item non-exempted from VAT. Consumption categories with zero rates are included. Exempted categories are excluded from the calculations. These categories are identified for 2019 from EC (2020) and EC (2006) and assumed constant for the rest of the years.
- VATNA are VAT liabilities. If more than one VAT rate applies to a COICOP 5 digit category (i.e., various products within the 5 digits category bundle, different rates along the year), the most prevalent rate is used.
- EXPNA are the expenditures (VAT included)
- NA indicates that VAT and EXP have been calibrated to National Accounts. Results from EUROMOD at COICOP - 5 digits categories are calibrated to Eurostat (2023) at COICOP at 2-3 digits categories (depending on data availability) of two years before than the rate-year. Adjustment factors at COICOP 3 digits are applied in cascade down to the underlying categories at COICOP 5 digits.
For more information on the economic and socio-demographic concepts used, see the EUROMOD Glossary and the list of breakdown variables.
References:
EC (2020). VAT rates applied in the Member States of the European Union. Situation at 1st January 2020. Directorate General for Taxes and Customs, European Commission.
EC (2006). Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.
Eurostat (2023). Final consumption expenditure of households by consumption purpose (COICOP 3 digit) Table [nama_10_co3_p3], Eurostat.