As a result of economic improvement, total government revenue from taxes and social security contributions amounted to 255.8 billion euros in 2015. The burden imposed by taxes and social security contributions is calculated by dividing this amount by GDP (the size of the economy). Last year, the burden increased for the fourth year in a row and is currently two percentage points higher than in 2009 when the burden reached the lowest level in the period 1995-2015.
Despite the increase from 2009 onwards, the burden is still below the level of the mid-1990s. At the beginning of this century, the burden imposed by taxes and social insurance contributions was reduced, partly as a result of revision of the tax system in 2001.
Higher revenue from wage and income tax contribute most to growth tax burden
More than a quarter of the burden increase since 2009 can be attributed to higher revenue from wage and income tax (including social insurance contributions). A combination of developments underlies the increase, for example the higher rate on the first tax bracket, adjustment of the limits of the tax brackets and introduction of the income-related general tax cut.
Although tax rates have hardly changed, higher revenue from corporation tax accounted for an increase of 0.5 percentage points of the tax and social contribution burden. In 2009 revenue from corporation tax declined rapidly due to lower profits and the opportunity for companies to settle their losses. In the ensuing years, revenue grew strongly relative to economic growth. This development accounted for an upward effect on the burden in the period after 2009.
Contributions under the Health Care Insurance Act were raised, which also caused the burden to grow, by 0.4 percentage points. Other factors are higher insurance tax rates and VAT rates.
Lastly, the recently introduced bank tax and landlord levy together accounted for an additional burden increase of 0.3 percentage points. Other policy measures, like reduction of property transfer tax from six to two percent, caused the burden to decrease.
|Wage and income tax 2013*||0.61|
|Contributions Health Care Insurance Act||0.42|
|Other social contributions||0.24|
|Insurance tax 2014*||0.21|
Dutch burden below EU average
Compared to other EU countries, the burden imposed by taxes and social security contributions in the Netherlands (37.8 percent) is below the EU average. The average for the entire European Union was 39.8 percent in 2015. The burden is above average in the Scandinavian countries, Belgium and France. In the Scandinavian countries, household income tax is relatively high, whereas employers in France pay relatively high social security contributions. In Belgium income tax and high social security contributions account for a relatively high burden. On the other hand, in many countries in Eastern Europe the burden is below the EU average, but these countries tend to spend less on social security, relative to the countries in Northern Europe.
The burden imposed by taxes and social insurance contributions is the total revenue of taxes and social insurance contributions expressed as a percentage of the gross domestic product (GDP). The term social contributions refers to legally required social contributions. These include contributions to the obligatory basic health care insurance, but are excluding supplementary (voluntary) insurances. To facilitate international comparison, data on tax and social insurance burden are based on Eurostat figures. Because a different calculation method was used, these figures may vary marginally from figures published by CBS. According to the Eurostat definition, the burden is between 0.5 and 1 percentage point higher and varies annually.