§ Lord Inglewoodasked Her Majesty's Government:
Whether they will show in a table the top rate of personal inheritance tax, or other comparable tax at death, in each country of the European Union. [HL3819]
§ Lord McIntosh of HaringeyI refer the noble Lord to the answer I gave the noble Lord, Lord Marlesford, on 22 of June 2000 (Official Report, col. WA39).
§ Lord Inglewoodasked Her Majesty's Government:
Whether they will show in a table the top rate of capital gains tax charged on disposal of shares in publicly quoted companies in each country of the European Union. [HL3818]
§ Lord McIntosh of HaringeyIt is difficult to make direct comparisons between the rates of tax charged on the disposal of shares in publicly quoted companies across the Euoprean Union. This is because in many countries there is no distinction made between capital gains and other income, for corporate disposal of shares in publicly quoted companies. Instead, in such cases, all income is taxed at the corporate rate.
34WAThe information provided in the table below is found in Corporate Tax Guide 2000, Ernst & Young; Individual Taxes 1999–2000, PriceWaterhouse Coopers; and HM Treasury (1998), Financial Statement and Budget Report 1998, London (figures for taper applicable in 1999). It outlines, for each country of the EU, the means by which the capital gains on the disposal of shares are taxed. The tax rates shown all relate to those in effect as at the end of December 1999, the most recent period for which comparative data are available. Since there is a distinction between taxation of corporate and individual disposal of shares in publicly quoted companies, the table includes a column for each.
35WA
Country Corporate Individual Austria There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (34%). Capital gains realised by a private person are generally exempt. Belgium Capital gains on shares are exempt from tax if dividends on the shares qualify for the participation exemption. Capital gains realised by a private person are generally exempt. Denmark Gains derived from disposals of shares owned for three years or more are exempt from tax unless the seller deals in shares. Shares owned for less than three years are taxed as other income (32%). Gains on sales of shares in quoted companies are exempt subject to certain conditions. Where these conditions are not met, gains are taxable as normal income (40%). Finland There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (28%). Capital gains are taxed at the flat rate of 28%. France Long-term capital gains are taxed at the standard rate (33?%) plus surtaxes. Short-term capital gains are included in ordinary income and subject to the standard corporate tax rate (33?%). Capital gains are subject to a 16% tax plus 10% social surcharges. Germany Capital gains tax rate is 40% plus 5.5% surcharge. Long-term capital gains are free of tax. Short-term gains are added to taxable income (53%). Greece Exemption applies where gains are held in a special reserve. Otherwise taxed at corporate tax rate (35% or 40%). Gains on listed shares are not taxable Italy Capital gains on assets that have been held for at least three years may be taxed at the company's option entirely in the year of sale (37%) or spread over a maximum period of five years. Where the substitute tax regime applies, the rate is 27%. Capital gains are taxable at the rate of 12½% or 27% dependent on the level of participation.
Country Corporate Individual Luxembourg There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (30%). Short-term gains are included in taxable income at normal rates (46%). Long-term gains are exempt subject to certain conditions. Netherlands There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (35%). Capital gains are generally not included in taxable income. Portugal There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (34%). The sale of shares is taxed at 10%. Republic of Ireland There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (24%). Most capital gains are taxed at 20%. Spain There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (35%). Short-term capital gains are taxed with ordinary income at a general rate of 39.6%. Long-term gains are taxed at 20%. Sweden There is no distinction between capital gains and other income. All income is taxed at the corporate tax rates (28%). National income tax on capital income is imposed at a flat rate of 30%. UK Gains are subject to corporation tax at the normal rates (30%). Capital gains are taxed at rates equivalent to the rates of income tax that would apply if gains were treated as the top slice of the individual's "savings" income. The UK system for taxing capital gains incorporates a taper, whereby effective tax rates decline over time. There is a separate taper for business assets and non-business assets*. *The 1998 Budget introduced a taper for capital gains tax on non-business assets, which replaced the previous capital gains tax indexation allowance. For non-business assets the taper reduces the effective rate of tax on capital gains for a higher rate taxpayer from 40 per cent in the first three years down to 24 per cent after the tenth year. For business assets there is also a taper, which reduces the effective rate of tax for a higher rate taxpayer from 40 per cent in the first year to 10 per cent after the tenth year. From April 2000 the taper increases, so that the effective tax rate for a higher rate 36WA taxpayer falls from 40 per cent in the first year to 10 per cent after the fourth year.
§ Lord Inglewoodasked Her Majesty's Government:
Whether they will show in a table the current top rate of tax on personal incomes in each country of the European Union, indicating in respect of each the threshold of income (expressed in euros and pounds sterling) at which this tax rate applies. [HL3820]
§ Lord McIntosh of HaringeyThe information requested for 1998, the most recent year for which comparative data are currently available, is contained in the OECD publicationTaxing Wages: Taxes and Wages and Salaries, Social Security Contributions for Employees and their Employers, Child Benefits, and is as follows:
Top Income Tax Rate Top Income Tax Threshold (,=s)1 Top Income Tax Threshold (Euros)1 Austria 50% 30,655 50,869 Belgium 55%2 36,153 59,992 Denmark 28.5%3 20,276 33,646 Finland 38%4 31,015 51,466 France 54% 26,973 44,759 Germany 53% 36,987 61,376 Greece 45% 15,004 24,898 Ireland 46% 7,652 12,697 Italy 45.5% 42,304 70,200 Luxembourg 46% 39,439 65,446 Netherlands 60% 28,378 47,090 Portugal 40% 18,885 31,337 Spain 47.6% 38,029 63,105 Sweden 25%5 15,087 25,035 UK 40% 27,100 44,970 1 Using currency exchange rates as at 28 September 2000. 2 Belgium: Government levies a crisis surcharge of 3 per cent, plus municipalities levy a local income tax by way of a surcharge on national tax, maximum of 10 per cent (of the national tax). Average rate is around 7 per cent. 3 Denmark: In addition, municipal income tax is levied at flat rates ranging from 24 per cent to 33 per cent. Average 31.7 per cent. This is a proviso that maximum combined rate of municipal and national rate cannot exceed 59 per cent. 4 Finland: In addition, municipal income tax is levied at flat rates ranging from 15 per cent to 19.5 per cent. 5 Sweden: In addition, local income tax is levied. Rates determined by municipality; average 31 percent.