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Sweden snags top spot in European tax ranking

3 Oct 2012, 09:01

Published: 03 Oct 2012 09:01 GMT+02:00

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For the third year running, Sweden has the highest marginal tax rate among OECD countries included in an annual survey carried out by tax consultancy KPMG, the Dagens Nyheter (DN) newspaper reports.

Number two on the list is Denmark with a marginal tax rate of 55.38 percent, followed by Spain with 52 percent.

According to the KPMG report, the Czech Republic has Europe's lowest marginal tax rate, a mere 15 percent, while Hungary is a close second lowest with 16 percent.

In the report, a marginal tax rate is defined as the tax high-earners pay on their last unit of income. In Sweden's case, that means high-earners pay 56.6 percent in tax on their last earned krona.

The KPMG report compares tax rates in 114 countries, including the 33 industrialized countries of the OCED.

The consultancy has found that the global financial crisis has had an impact on tax rates in a number of countries.

"During the last year, more countries have raised their marginal tax rates than have cut them, and the financial crisis is almost always given as an answer," Helena Robertsson, head of KPMG's tax business in Sweden, told DN.

However, Sweden may soon lose its grip on the top spot in the ranking if French President Francois Hollande succeeds in implementing a marginal tax rate of 75 percent on those who earn more than 1 million euros.

Story continues below…

The study also looks at what happens when social fees such as mandatory pension fees are added into income tax calculations for people earning $100,000. The adjustment moves Sweden down to 20th place with 36.3 percent.

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Your comments about this article

09:42 October 3, 2012 by RobinHood
Congratulations Sweden on being number one once again. Swedish taxpayers will be celebrating this wonderful news.

This is an excellent day for politicians and supporters of the Left and Social Democrat party to suggest that Swedes should pay even more tax to ensure those wily French don't steal our coveted number one position.
10:20 October 3, 2012 by Swedish Cat
Easy math. We have more people living of our system than that actually are working! Please keep on bringing more people in year on year that lacks education to keep the stats up. If we keep up this madness no tax money in the world will keep us in a good standard.
11:02 October 3, 2012 by eppie
When we are not considering spain (that is raising taxes because of its huge deficit), the countries with high taxation are topping most list like, wealthiest country, most competitive economy, happiest people, healthiest economy in crisis.

11:28 October 3, 2012 by Dr. Dillner
Sweden needs to fund all its social entitlements somehow.
11:44 October 3, 2012 by rfmann
"Sweden snags top spot..."

Also known as the bottom spot.
12:35 October 3, 2012 by EtoileBrilliant
Agree with Eppie on this won, there is a high correlation between "happiness indices" and tax rates.

Where Sweden falls down is the large discrepancy between high aggregate income tax rates (including employers contribution) and the relatively low capital gains taxes.

My Swedish accountant told me that no one gets rich in Sweden by working hard. You need to speculate. I listened to him and cut more working time down to 80% with very little change in end of month income.
13:05 October 3, 2012 by engagebrain
Try reading the article - last para

.... what happens when social fees such as mandatory pension fees are added into income tax calculations for people earning $100,000. The adjustment moves Sweden down to 20th place ...........

So really 20th place for high earners - there goes another myth
15:16 October 3, 2012 by Abe L
Nothing to be proud of and this should really be a target for the government to work on and drop in the ranking.

High taxes are a slap in the face for every working citizen trying to make ends meet. Especially when the taxes aren't used for matters that benefit the taxpayers, so aside from paying taxes you're stuck with horribly congested infrastructure, very poor and expensive public transportation, sub-par healthcare, rising crime levels and a police force that is only used to write traffic tickets.
15:54 October 3, 2012 by stateohio905
I really wonder why we pay 35% in the USA. We get literally nothing for that. Public schools and other "free" staff are paid from the additional state's and local taxes.
18:14 October 3, 2012 by Maddeshusband
Sweden has it´s house in order.

No debt crisis, no trouble to get loans (if needed) and no unnaturally high interest.

Sweden doesn´t borrow money for a country´s normal consumtion and investments.

This is where the tax rate should be to achieve this, and there it is. Simple.
18:43 October 3, 2012 by Great Scott

More useless waffle from yourself, you really need to take those dark sun glasses off and see the light of day.

I know, you want your beloved Moderate party (who are having a whale of a time at your expense) to reduce nurses, home helps, wardens, teachers, doctors, street cleaners, dustmen and any other people working for central or local government paid out of tax payers money. This of course would turn Sweden into a third world country, but you would be happy.

@Abe L

"horribly congested infrastructure, very poor and expensive public transportation, sub-par healthcare, rising crime levels". Is the effect of tax cuts!
20:47 October 3, 2012 by DAVID T
56.6% tax and 25% Vat - doesn't leave much
08:21 October 4, 2012 by skogsbo
david, what proportion of your income are you paying 56.6% tax on ? :) There are other countries like Greece where you don't need to pay tax at all, but would you rather live there?
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