VAT and Tax: Best Solutions for You

VAT and Tax: Best Solutions for You


It should be noted here that each VAT rate has increased by one percentage point since 2012, which explains the increase in VAT paid. The amounts per OECD modified consumption unit averaged around € 2,506 in 2012 and € 2,594 in 2016.

Consumer research data as a basis

The review uses the latest consumption survey data from 2016. Its target population was private households permanently residing in USA. The initial sample size was about 8,200, and the proportion of approved data was 46 percent, or 3,673 households.

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Data were collected through telephone and site interviews as well as a two-week receipt collection and notebook period. Background information on households has also been collected from the population register and registers related to income and social benefits.

The Right Data

The data do not include excise duties, as they are not yet available for the 2016 data from the national economy input-output tables. Excise duties include e.g. taxes on alcohol, tobacco and fuel.

  • The VAT paid has been calculated in the consumption survey data for each commodity group according to the VAT rates. This review uses their total as a share of gross income as well as consumption expenditure. In addition, the total amount of direct taxes and parafiscal charges paid, as well as its share of gross income, has been calculated.
  • Income and tax variables have been converted to comparable between households using the OECD modified consumption unit scale, where the first adult in a household gets a ratio of 1, others over 13 get a ratio of 0.5 and those under 14 get a ratio of 0.3.

The decisive variables used in this analysis are deciles calculated from gross income and consumption expenditure, which are formed by arranging households according to their income per unit of consumption or consumption into ten groups, so that each group has the same number of households in the population. The small business tax rate is to be calculated there.

VAT rates have risen

According to the Government’s financial statements, EUR 17.1 billion in VAT was paid in 2016. Of this, the share paid by households was more than ten billion euros. By comparison, according to the statistics on taxable income, direct taxes amounted to EUR 30.4 billion, of which, for example, much of the income tax in the present state is EUR 5.8 billion.


Consumption taxation has been justified by the effects on employment – lowering labor taxation and raising consumption taxation has been thought to improve labor supply and reduce distortions in the labor market. However, based on research evidence, the employment effects have been assessed as small.


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