Table Annex: Detailed information on the impact of the tax system on social expenditure

Transcription

1 : Detailed information on the impact of the tax system on social expenditure A. Average Itemised Tax Rates (AITR %) B. Average implicit indirect tax rates of consumption out of benefit income C. Tax breaks for social purposes Missing values are presented as follows: m data not available; a data do not exist; x data included in another category. SOCX Manual/Methodology See Part II. (p.88) OECD Social, Employment and Migration Working Papers No. 124, October 2011: Is the European welfare state really more expensive? Indicators on social spending, and a manual to the OECD Social Expenditure database (SOCX)" II.4. Net (after tax) social expenditure

2 AUSTRALIA Table Annex Detailed information on the impact of the tax system on social expenditure A. Average Itemised Tax Rates (AITR %) 2001 (a) 2003 (a) 2005 (b) 2007 (b) 2009 (b) Old-age cash benefits 1a - public pensions Age Pension Wife's Pension na na Widow's B Pension na na na 1b - early retirement benefits 1c - private pensions Superannuation pension Superannuation Lump Sums 2 Survivors' benefits 2a - public pensions Veteran's Service Pensions 3 Incapacity-related benefits na na Disability Support Pension 3c - Sickness payments Sickness Allowance 4 Family cash benefits 4a - Family benefits Parenting Allowance na na Partner Allowance Carer's Payment 4c - Sole parent benefits Sole Parent Widow Allowance 6 Unemployment 6b - unemployment assistance benefit Unemployment Benefits Wage income The AITRs for wage income, superannuation pensions and superannuation lump sums were calculated using a sample file of Australian tax returns in All other AITRs were calculated using the STINMOD model, a static microsimulation model developed by the National Center for Social and Economic Modelling (NATSEM). a.the AITRs were obtained by calculating the amount of tax paid in aggregate with and without the income streams. The difference between the taxes paid was then divided by the value of the income stream to reveal the value of the AITR. b. Tax paid on an income stream was calculated by dividing income from stream by total tax liability and then multiplying it by total tax paid. This amount was then divided by the total income from stream to calculate the AITR. This methodology has been adopted to align with the instructions provided by the OECD. c. Figure is derived from a small sample of observations and caution should be taken with interpretation. Sources: STINMOD distributional model. Revenue Group of The Treasury, Australian Government. B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of Australian dollars (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 9.9% 10.1% 9.8% 9.3% 8.9% 8.7% 8.3% (7) using a broad concept of the indirect tax base (5)/(2) 13.5% 13.6% 13.0% 12.4% 11.9% 11.9% 11.6% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 15.1% 15.3% 14.7% 14.1% 13.6% 13.6% 13.3% Source: OECD on-line National Accounts database ( for lines 1 and 2, except Government wages from Australian National Accounts (table 40); and OECD Revenue Statistics database ( for lines 3, 4, and 5.

3 AUSTRALIA Table Annex Detailed information on the impact of the tax system on social expenditure C. Tax breaks for social purposes (in millions of Australian dollars) 2001 (d) 2003 (e) 2005 (f) 2007 (g) 2009 (h) Tax breaks similar to cash benefits (i) Family: Tax offsets for taxpayers with dependants Tax offset for housekeeper who cares for a prescribed dependant Tax offset for dependant spouse, child-housekeeper and housekeeper who cares for prescribed dependent Tax offsets for taxpayers supporting a parent, parent-in-law, or invalid relative Other areas: Medical expenses tax offset Exemption of certain income support benefits, pensions or allowances Exemption of Utilities Allowance and Seniors Concession Allowance Exemption of payments made under the First Home Owners Grant Scheme Income averaging for authors, inventors, performing artists, production associates and sportspersons Exemption of post-judgment injury awards in personal injury compensation cases Capped taxation rates for lump sum payments for unused recreation and long service leave (j) Concessional treatment of non-superannuation termination benefits (j) Taxation of five per cent of unused long service leave accumulated by 15 August 1978 (j) Capital gains tax exemption on the sale of a small business at retirement (j) Small business capital gains tax exemption for assets held for more than 15 years (j) Exemption of rent subsidy payments under the Commonwealth/State mortgage and rent relief schemes Tax offset for low income earners For informaton only: these items are not included in the sum of TBSPs as that constitute a double counting with the calculations on Average Direct Tax Rates over benefit income Exemption of the Child Care Rebate (Revenue foregone) Tax offset for child care (Revenue foregone) Exemption of Child Care Benefit (Revenue foregone) Exemption of the Baby Bonus (Revenue foregone) Exemption of the first child tax offset (Baby Bonus) (Revenue foregone) Exemption of Family Tax Benefit, Parts A and B (Revenue foregone) Exemption of certain veterans' pensions, allowances or benefits, compensations, and particular WWII-related payments for persecutions (Revenue foregone) (d) (e) (f) (g) (h) (i) This series has been revised to exclude Exemption from the Medicare Levy for residents with a taxable income below a threshold This series has been revised to exclude Exemption from the Medicare Levy for residents with a taxable income below a threshold ($380m), as this was factored into the calculation of AITRs. This series has been revised to exclude Exemption from the Medicare Levy for residents with a taxable income below a threshold ($380m), Mature Age Worker Offset ($425m) and Senior Australian Tax Offset ($606) as this was factored into the calculation of AITRs. Tax breaks provided through GST exemption for child care services has also been removed from the series. Data have been updated using 2011 Tax Expenditure Statement. This series has also been revised to exclude Exemption from the Medicare Levy for residents with a taxable income below a threshold ($446m), Mature Age Worker Offset ($455m) and Senior Australian Tax Offset ($410) as this was factored into the calculation of AITRs. Tax breaks provided through GST exemption for child care services has also been removed from the series. Explanatory notes for these data is available in the sheet "Q4." The rebate for private health insurance has been moved from the category 'Tax breaks similar to cash benefits' to 'Tax breaks to stimulate private social protection' to be consistent with other countries. (j) All series from 2001 to 2007 have been revised to include 'Capped taxation rates for lump sum payments for unused recreation and long service leave', 'Concessional treatment of non-superannuation termination benefits', 'Concessional treatment of non-superannuation termination payments', 'Capital gains tax exemption on the sale of a small business at retirement', and 'Small business capital gains tax exemption for assets held for more than 15 years'. These tax breaks were previously included in the Memorandum Item on Tax breaks for pensions. Source: Australian Government (2011, 2009, 2007,2005, 2003), Tax Expenditure Statement, The Treasury, Canberra. For information only : Exemptions from Goods and Services Tax for social products and services (excluded from total) (j)

4 AUSTRALIA Table Annex Detailed information on the impact of the tax system on social expenditure GST exemption for education supplies (e.g. education sources, student accommodation) GST exemption for drugs and medicinal preparations GST exemption for medical aids and applicances GST exemption for medical and health services GST exemption for private health insurance GST exemption for residential care, community care and other care services (e.g. publicly funded aged care, disability care) GST exemption for child care services (j) The GST is an indirect, broad based consumption tax charged at a rate of 10 per cent. Several goods and services that fall within the OECD's definition of a social product are exempt from this tax. The value of these exemptions are listed above. If this type of tax expenditure in included in the calculation of net social expenditure for other countries, it may be appropriate to similarly incorporate this information in the calculation of net social expenditure in Australia. Estimates of tax expenditure on these concessions is not available for 2003 or Note that tax expenditures relating to GST exemptions was introduced into the Tax Expenditures Statement in For this reason, tax breaks relating to GST exemptions are not available for prior years. Source: Australian Government (2011), Tax Expenditure Statement, The Treasury, Canberra. Tax breaks to stimulate private social protection (not including pensions) % tax offset for expenditure on private health insurance (l) Deduction for gifts to deductible gift recipients Deduction for gifts to approved donees Deduction for contributions with an associated minor benefit Partial rebate for certain non-profit, non-government bodies Capped exemption for public benevolent institutions (excluding public hospitals) Deduction for donations to prescribed private funds (k) Data have been updated using revised estimates published in the 2011 Tax Expenditure Statement. (l) The rebate for private health insurance has been moved from the category 'Tax breaks similar to cash benefits' to 'Tax breaks to stimulate private social protection' to be consistent with other countries. Source: Australian Government (2011, 2009, 2007,2005, 2003), Tax Expenditure Statement, The Treasury, Canberra. Memorandum Items (m) Tax breaks for pensions Superannuation - capital gains tax discount for funds Concessional taxation of employer contributions Concessional taxation of superannuation entity earnings Concessional taxation of funded superannuation Concessional taxation of unfunded superannuation lump sums Superannuation - deduction and concessional taxation of certain personal contributions Superannuation - measures for low-income earners Superannuation - spouse contribution offset Superannuation - tax on funded lump sums relating to post-june 1983 service (l) (m) All series from 2001 to 2007 have been revised to exclude 'Capped taxation rates for lump sum payments for unused recreation and long service leave', 'Concessional treatment of non-superannuation termination benefits', and 'Concessional treatment of non-superannuation termination payments' as these tax concessions are related to employment termination, not pensions. Data have been updated using revised estimates published in the 2011 Tax Expenditure Statement. Source: Australian Government (2011, 2009, 2007,2005, 2003), Tax Expenditure Statement, The Treasury, Canberra. Notes: Data is reported for the financial year commencing on 1 July of the year indicated and finishing on 30 June of the following year and 2011 figures are new and 2009 figures have been updated using estimates published in the 2013 Tax Expenditures Statement.

5 AUSTRIA A. Average Itemised Tax Rates (AITR %) Old-age cash benefits (1 +3) 17.7% - public pensions 17.0% 16.6% 15.9% 15.0% 15.4% 15.8% - private pensions 13.0% 16.6% 15.9% 15.0% 15.4% 15.8% Incapacity-related benefits - Disability pensions 17.7% 17.0% 16.6% 15.9% 15.0% 15.4% 15.8% - Occupational Injury benefits 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% - Sickness payments 30.0% 30.0% 29.3% 22.0% 22.0% 22.0% 22.0% Source: Ministry of Finance (Bundesministerium fur Finanzen), Wage Tax Statistics (2001, 2003, 2005, 2007, 2009, 2010, 2011). B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of euros (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 16.7% 16.7% 16.5% 16.3% 16.3% 16.0% 16.0% (7) using a broad concept of the indirect tax base (5)/(2) 19.3% 19.3% 18.9% 18.6% 18.6% 18.2% 18.3% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 22.4% 22.5% 22.0% 21.8% 22.0% 21.5% 21.5% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5. C. Tax breaks for social purposes (in millions of euros) Tax breaks similar to cash benefits Family: Tax credits for one-parent families ("Alleinerzieherabsetzbetrag") Other areas: Appliances for the disabled (Befreiung für Versehrten- und Invalidenfahrzeuge) 2 Abs.1 Z 5, Special tax relief (Außergewöhnliche Belastungen) 34, Tax measures to stimulate private social protection (including pensions) Contributions to health, accident and pension insurance (Versicherungsbeiträge) 18 Abs. 1 Z Memorandum Items Tax breaks for pensions Deduction of contributions to private pension insurances or funds as "special expenses" Premium (payable tax credit) for contributions to pension funds Source: Budget Accounts, Foerderungsbericht (2001, 2003, 2005, 2007, 2009, 2010, 2011), Ministry of Finance, Austria.

6 BELGIUM A. Amount of direct tax paid on benefit income (in millions of euros) A.Taxes paid on transfer income (A1 minus A2, then adding local tax rate *) Pensions: PIT Sickness: PIT Early retirement: PIT Unemployment benefits: PIT Total PIT (A1) Pensions: tax credit Sickness: tax credit Early retirement: tax credit Unemployment benefits: tax credit Others Total tax credits (A2) Local tax rate 7.1% 7.4% 7.1% 7.4% 7.3% 7.3% 7.5% B. Social security contributions Total (A + B) * Local tax rate is applied to income tax, which overestimates local tax amount as local taxes are only paid when the amount of the credit does not exhaust income tax. So for 2011, Taxes paid to on tranfers income refer to Total PIT - Total tax credits * local tax (A1 minus A2, then adding local tax rate *) ( )* ( )= B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of euros (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 14.3% 14.4% 15.3% 15.0% 14.0% 14.4% 14.2% (7) using a broad concept of the indirect tax base (5)/(2) 16.9% 17.1% 17.8% 17.7% 16.6% 17.0% 16.9% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 20.1% 20.5% 21.5% 21.3% 20.4% 20.8% 20.7% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

7 BELGIUM C. Tax breaks for social purposes (in million of Euros) Tax breaks similar to cash benefits Family: Tax credit for children Allowance Childcare expenses Other areas: Compl. Sickness contr Allowance "ALE" Tax breaks to stimulate private social protection (not including pensions) Memorandum Items Tax breaks for pensions Pension savings (3rd pillar) Pension savings (2d pillar) Source: Ministry of Finance, Belgium, from IPP (Impôt des Personnes Physiques).

8 CANADA A. Average Itemised Tax Rates (AITR %) 1 Old-age Cash Benefits a - Public Pensions (OAS) b - Private Pensions Canadian Pension Plan (Retirement) Canadian Pension Plan (Disability) Employment Insurance a - Regular Employment Insurance b - Parental Leave Payments - - n.a. n.a. n.a. n.a. n.a. n.a. 4c - Active Labour Market Programs Worker's Compensation Guaranteed Income Supplement Social Assistance Universal ChildCate Benefits (UCCB) Wage Income * The sample used for the microdataset simulation was a stratified sample of approximately records, weighted to represent all taxfilers in Canada. The sample is provided by the Canada Revenue Agency. B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of Canadian dollars (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 10.5% 10.7% 10.4% 9.6% 8.6% 8.8% 8.9% (7) using a broad concept of the indirect tax base (5)/(2) 13.5% 13.6% 13.3% 12.5% 11.3% 11.4% 11.6% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 15.4% 15.6% 15.3% 14.4% 13.3% 13.4% 13.5% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

9 CANADA C. Tax breaks for social purposes (in millions of Canadian dollars) 1 Tax breaks similar to cash benefits (total without 5, 8 and 17 below) Family: 2 Infirm dependant/ Caregiver credit Child care expense deduction Adoption Expense Deduction Amount for an eligible dependant Children's fitness tax credit Child tax credit Investment Tax Credit for Child Care Spaces (for Corporations) Child Fitness tax credit Other areas: 1 Disability Tax Credit Infirm dependant credit Disability Supports Deduction Medical expense tax credit Tax credits for employee-paid Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions Tax credits for employee-paid EI and Quebec Parental Insurance Plan (QPIP) contributions Canada Employment credit For information only: not included in total TBSP 5 Canadian Child Tax Benefit/National Child Benefit (amount not included in total TBSP, as already accounted in SOCX ) Age amount (amount not included in total TBSP, as already taken into account when calculating AITRs) Universal child care benefit (amount not included in total TBSP) For information only as refundable credits have been removed from the tax expenditures section as these are now classified as spending measures in public accounts. 6 Refundable Medical Expense Supplement Portion of refundable tax credits that offsets tax liability Working income tax benefit Tax breaks to stimulate private social protection (not including pensions) Non-taxation of employer paid health and dental benefits Deductibility of charitable donations from corporate income tax Charitable donations credit Non-taxation of donations of publicly-listed securities (reduced inclusion rate for capital gains) Memorandum item Tax breaks for pensions (1+2+3) Revenue foregone method: 1 Pension Income Deduction Registered retirement savings plans (RRSPs) Deduction for contributions Non-taxation of investment income Taxation of withdrawals Net tax expenditure Registered pension plans (RPPs) Deduction for contributions Non-taxation of investment income Taxation of withdrawals Net tax expenditure Supplementary information: Present value of tax assistance for retirement savings plans * * The present-value estimates reflect the lifetime cost of a given year s contributions. This definition is different from that used for the cash-flow estimates, and thus the two sets of estimates are not directly comparable. Data supplied by Finance Canada, from Department of Finance Canada (2009, 2004, 2002), Tax Expenditures and Evaluations, Ottawa. 1. Since 2001 Tax expenditures are for federal measures only cannot be considered complete, therefore cannot be compared to some other countries estimates, given that sub-national expenditures are not included. 1. The totals may overestimate total expenditure, as interactions between measures are not taken into account. The sample used for the microdataset simulation was a stratified sample of approximately 450,000 records, weighted to represent all taxfilers in Canada. The sample is provided by Canadian Customs and Revenue Agency.

10 CHILE A. Amount of direct tax paid on benefit income (in millions of Chilean Pesos) Old-age cash benefits (1 +3) - public pensions private pensions Incapacity-related benefits - Disability pensions - Occupational Injury benefits - Sickness payments Note: Figures represent only the income tax paid on pensions. Source: - SII Annual Sworn Statement N 1812 on Revenue from Retirement, Pensions or Pawnshops, and Withholding of Second Category Tax (Income Tax Law). B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in Millions of Chilean Pesos (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 13.9% 14.5% 15.0% 15.0% 13.5% 14.2% 14.3% (7) using a broad concept of the indirect tax base (5)/(2) 16.7% 16.7% 16.9% 16.8% 15.1% 15.9% 16.0% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 18.4% 18.1% 18.1% 17.9% 16.2% 17.0% 17.1% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

11 CHILE C. Tax breaks for social purposes (in Millions of Chilean Pesos) Tax breaks similar to cash benefits Family Other areas Tax breaks to stimulate private social protection (not including pensions) a), b), c) Item 1 Health insurance (tax deduction) n.a Item 2 Unemploment insurance (tax deduction) n.a Item 3 Donations for social purposes (tax credit and tax deduction) Item 4 Income from renting DFL 2 housing (tax exempt) n.a Item 5 Health services (VAT exempt) n.a Item 6 Contributions to Private Health System (VAT exempt) n.a Item 7 Refund of customs duties when importing equipment for disabled people n.a. n.a. n.a. n.a. n.a. n.a. n.a. Item 8 Lower customs duties for disabled people that import vehicles with special features n.a. n.a. n.a. n.a. n.a. n.a. n.a. Memorandum Items Tax breaks for pensions d), e) n.a Deduction of contributions to private pensions (e.g occupational pension plans, individual retirement accounts, RRSPs, Superannuation, etc) n.a Non-taxation of investment of private pension funds n.a Source: - SII Annual Sworn Statement N 1812 on Revenue from Retirement, Pensions or Pawnshops, and Withholding of Second Category Tax (Income Tax Law). Tax years 2002, 2004, 2006, 2008, 2010, 2011 and Tax Expenditure Reports elaborated by Servicio de Impuestos Internos (Chilean Internal Revenue Service). Notes: a) Figures in millions of Chilean pesos. b) Tax expenditure measurement began in 2002 and is made on a cash basis. c) Tax breaks concerning pensions (compulsory or voluntary) were excluded. d) Figures in millions of Chilean pesos. e) It is only included the compulsory deduction of contributions to private pensiones

12 CZECH REPUBLIC A. Amount of direct tax paid on benefit income (in millions of Czech koruny) Total tax paid on transfer income old-age pensions Source: Ministry of Finance, Tax Policy Unit; Czech Social Security Administation. B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of Czech koruny (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 14.3% 14.2% 16.6% 16.6% 16.4% 16.5% 17.2% (7) using a broad concept of the indirect tax base (5)/(2) 16.1% 16.0% 17.8% 17.8% 17.5% 17.5% 18.2% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 20.2% 20.6% 22.8% 22.5% 22.2% 22.3% 23.1% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

13 CZECH REPUBLIC C. Tax breaks for social purposes (in millions of Czech koruny) Tax breaks similar to cash benefits Tax breaks similar to cash benefits 1.1 Tax exemptions (Personal Income Tax): * non-monetary benefits covered from the fund for cultural and social needs or profit after tax provided by an employer to his employee in form of recreational, health care, educational facilities, etc. 1.2 Allowances from the tax base (Personal Income Tax; social insurance contributions are deductible from the tax base): n.a. n.a. Family: * per each dependent child living with the taxpayer in one household * per each handicapped dependent child requiring an escort Other areas: * per handicapped spouse requiring an escort living with taxpayer in one household unless the spouse's own income exceeds low income limit * per handicapped taxpayer requiring an escort * gifts donated to municipalities or to legal entities for financing science, education, culture, schools, police, youth welfare, animal protection, environment, humanitarian projects etc Tax breaks to stimulate private social protection (not including pensions) Corporate Income Tax * tax credits for disabled employees Personal Income Tax * tax credits for disabled employee Memorandum item Tax breaks for pensions Deduction of contributions to private pensions - income tax exemptions and allowances from the tax base * exemption of contributions of employers on behalf of their employees on pension insurance with state contribution from personal income tax up to a ceiling of 5 per cent of employer's gross wage. Until 2009 maximum exemption is CZK for one employee n.a. n.a. * deduction of contributions of employers on behalf of their employees on pension insurance with state contribution from employer's tax base up to a ceiling of 3 per cent of gross wage of the employee. Until 2009 maximum exemption is CZK for one employee n.a. n.a. * contributions of employees on their pension insurance with state contribution * deduction on behalf on pension insurance with state contribution from personal income tax up to a ceiling Non-taxation of investment of private pension funds * there is income tax of 15 % from the returns of private pension funds - standard tax rate is 28 % * reduced 15 % withholding tax on benefits/returns paid by the pension funds to the contributors * reduced 15 % withholding tax on benefits/returns paid by the life insurance to the contributors Sources: Tax Statistics, Czech Ministry of Finance; and the Association of Pension Funds of the Czech Republic. Non-monetary benefits covered from the fund for cultural and social needs or profit after tax provided by an employer to his employee in form of recreational, health care, educational facilities, etc.were estimated based on the previous trend for 2005,2007,2009.

14 DENMARK A. Average Itemised Tax Rates - AITR % Tax and 2005 Tax and 2007 Tax and Tax and 2011 Social Social Social Tax and Social security Social Tax and Social security Tax and Social security 1 Social pension - state old age pension (98%) (98%) (98%) (98%) (98%) ('98%') ('98%') - disability pension (75%) (75%) (77%) (85%) (88%) ('89 %') ('89 %') - anticipated old age pension (84%) (84%) (90%) (76%) (76%) ('76%') ('76 %') 2 Supplementary pensions (ATP) Civil servants pension Early retirement pensions (Delpension) Sickness benefit Parental leave ' 7 Unemployment benefits Early retirement benefits Occupational accidents - except: Occupational accidents and decease ( ) (22%) (23%) (26%) War victims, accidents, sailors ( ) (60%) (40%) (39%) Handicapped children and adults ( ) (47%) (41%) (47%) Survivors Childbirth benefit (barsel) Items under active labour market policy - Measures by regional labour market councils Employment measures for disabled Other, war victims (90%) (90%) (84%) (88%) (89%) ('87%') ('87%') 14 Other, wage earn. Guar. Fond Cash payments to refugees ( ) Low income Transfers taxed as wages In parentheses: proportion of spending subject to taxation if not 100%. B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions Danish kroner (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 26.3% 25.9% 26.2% 26.1% 23.5% 23.7% 23.9% (7) using a broad concept of the indirect tax base (5)/(2) 28.6% 28.2% 28.6% 28.3% 25.6% 25.8% 26.0% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 33.6% 33.2% 33.7% 33.6% 31.0% 31.0% 31.3% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

15 DENMARK C. Tax breaks for social purposes (in millions of Danish kroner) Tax breaks similar to cash benefits Family: Other areas: Supplement for older people "Engangsbelob" (67+) Capital tax reduction for older people (67+) 0 0 Housing for older people "Plejehjem" Tax breaks to stimulate private social protection (not including pensions) Memorandum item Tax breaks for pensions Source: Ministry of Finance, Denmark.

16 ESTONIA A. Average Itemised Tax Rates (AITR %) Total tax paid (including soc. sec. cont.) over transfer income pensions old age pensions disability pension survivor's pension benefits for temporary incapacity for work unemployment benefits income tax: unemployment insurance benefit insurance benefit upon lay-off benefit upon insolvency of employer social security contributions: insurance benefit upon lay-off benefit upon insolvency of employer family benefits maternity benefit parental benefit B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in Millions of Estonian kroon (EEK). (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 20.4% 21.8% 21.4% 21.9% (7) using a broad concept of the indirect tax base (5)/(2) 21.4% 22.8% 22.3% 22.8% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 24.1% 26.6% 26.1% 26.5% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

17 ESTONIA C. Tax breaks for social purposes (in Millions of EUR). Tax breaks similar to cash benefits Family: Increased basic exemption upon provision of maintenance to child Additional allowance for 2nd+ children, accrual Deduction from tax base: educational expenses, accrual Deduction from tax base: education loan interests, accrual Not included in the total Additional allowance for couple, accrual Other areas: Deduction from tax base: mortgage interest payments, accrual Tax breaks to stimulate private social protection (not including pensions) Deduction from tax base: contributions to voluntary pension funds, accrual Memorandum Items Tax breaks for pensions Additional allowance for pensioners, this is not cash benefit but tax expenditure Source: Estonian Tax and Customs Board

18 FINLAND A. Average Itemised Tax Rates (%) 1 Old-age cash benefits 1a - public pensions c - private pensions Survivors' benefits 2a - public pensions Incapacity-related benefits 3a - Disability pensions b - Occupational Injury benefits c - Sickness payments Family cash benefits 4a - Family benefits b - Maternity and parental leave payments Active labour market policies 5a - benefits while on training Unemployment 6a - unemployment insurance benefit b - unemployment assistance benefit The micro-simulation model used in the Ministry of Finance is based on a representative sample of some individual taxpayers. The model is used for the planning of national tax policies and for estimating the effect of tax policy alterations on tax revenues and on the income tax liabilities of taxpayers at different income levels. The information is in principle collected for the Income Distribution Survey from Statistics Finland. The sample covers about 0,5% of the total taxpayer population, but the model has been made representative for the total taxpayer population. The dataset is updated annually.there is a break in series in 2009 for unemployment average itemised tax rates resulting from a change in definition. Source : Ministry of Finance. B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of euros (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 21.1% 21.3% 20.7% 19.8% 18.6% 18.4% 19.6% (7) using a broad concept of the indirect tax base (5)/(2) 23.2% 23.5% 22.8% 21.9% 20.7% 20.4% 21.6% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 26.8% 27.3% 26.7% 25.6% 24.6% 24.2% 25.6% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database ( for lines 3, 4, and 5.

19 FINLAND C. Tax breaks for social purposes (in millions of euros) Tax breaks similar to cash benefits Family: Other areas: Tax breaks to stimulate private social protection (not including pensions) Cash donations to Charities Memorandum Items Tax breaks for pension Deduction of contributions to private pensions Source: Ministry of Finance, Finland.

20 I.A.2.1 FRANCE A. Amount of direct tax paid on benefit income (in millions of euros) Total (income tax + social security contributions) a Old-age, survivors' benefits, disability pensions b Occupational Injury benefits c Sickness payments a-4c Family and sole parent cash benefits b Maternity and parental leave payments Active labour market policies Unemployment Housing Note: Data for 2009 have been estimated. There is a break in the series in 2010 due to the underlying model used to derive estimates. Sources 2010: DREES, based on estimates from INES model (DREES/INSEE) and the Comptes de la protection sociale (DREES). New methodology is presented in A. Renoux (2013), «Les prélèvements obligatoires directs réduisent de 5 % le montant brut des prestations de protection sociales», La protection sociale en France et en Europe en 2011 édition 2013, DREES, document de travail série statistique n 181, June 2013 ( pp ). Sources : DREES/INSEE, based on estimates from ACOSS and the Comptes de la protection sociale (DREES). B. Average implicit indirect tax rates of consumption out of benefit income Indirect taxes paid out of consumption of cash transfers, in millions of euros (1) Private final consumption expenditure (2) Private consumption plus Government consumption minus Government wages (3) General consumption taxes plus excise duties ( ) General taxes Excises (4) Taxes on production sale transfer (5100) (5) Taxes on Goods and Services (5000) Implicit average indirect tax rate on consumption out of benefit income: (6) using general consumption taxes plus excise duties (3)/(2) 15.2% 14.9% 15.0% 14.7% 13.7% 13.8% 14.0% (7) using a broad concept of the indirect tax base (5)/(2) 16.9% 16.5% 16.6% 16.2% 15.3% 15.4% 15.8% (8) using a broad concept of the indirect tax base and ignoring government consumpion (5)/(1) 19.7% 19.5% 19.7% 19.2% 18.3% 18.5% 18.9% Source: OECD on-line National Accounts database ( for lines 1 and 2; and OECD Revenue Statistics database