Commission’s annual report on taxation shows a shift in the EU tax mix
The Commission’s annual report on taxation, published today, offers a detailed overview of taxation policies in all Member States, assesses recent trends in EU tax systems and identifies ways to enhance compliance.
The report shows that over the past decade the tax mix has gradually shifted away from consumption‑based taxes towards capital‑based taxes, while the share of labour taxes has increased among countries pursuing fiscal consolidation. Looking into specific tax types, corporate income tax and personal income tax have gained weight in the tax mix, while environmental and property taxes have receded. Furthermore, Member States have reported a total of 399 tax reforms for 2025.
The report shows that the EU’s overall tax-to-GDP ratio increased to 39.4% in 2024, a slight increase from the decade-low dip of 2023, with 22 Member States recording an increase in the ratio. It also shows that labour taxes – including social contributions – remain the main source of revenue, accounting for 51.5% of total tax receipts, followed by consumption taxes (26.8%) and capital taxes (21.6%).
The Technical Support Instrument (TSI) supported Member States’ efforts to modernise tax administrations and improve compliance, with 22 % of TSI projects focusing on improving tax compliance and 21 % on digitalisation of revenue administration, the report found.
At a time when Europe needs to channel resources into new strategic priorities, such as competitiveness and security, the report highlights that tax policy remains central to the EU economic and political agenda. Well-designed tax systems can support employment, guide investment, foster innovation, and contribute to a fairer and more sustainable society.
