Taxation: only two countries are worse than Portugal

  • ECO News
  • 17 July 2017

Portugal stood in the bottom three places among OECD's 35 countries. The Republic's tax policies are not competitive enough.

Among the 35 OECD countries assessed, Portugal only stands above Italy and France in terms of the quality of their tax policies. VAT is the tax that mostly pulls Portugal to the bottom three of the Tax Foundation ranking (Spanish content). Estonia has held the first place for three years now.

Portugal stands at 33rd place in the 2016-2017 Tax Regulation Index from Tax Foundation. When analyzing those policies separately, the best score is held by property tax, in which Portugal stands at 20th place. Portugal comes in 30th for Company Tax (IRC) and Personal Income Tax (IRS) comes in 31st place.

VAT is the category in which Portugal has the worst performance, standing at 33rd place — the normal Portuguese VAT is 23%. In that category, Switzerland stands at first place and only Poland and Hungary stand below Portugal — in Hungary, VAT is 27%.

Estonia won for the third time in a row, because it has “the best designed tax code in the OECD”. After Estonia comes New Zealand, Latvia, Switzerland and Sweden, respectively. At the opposite end comes France, in last place, surpassed by Italy. Both countries are harmed because of their taxes on companies and property.

The 2016-2017 Tax Regulation Index from Tax Foundation assesses policies from OECD countries, highlighting the importance of structured tax policies in economic development, because they help the compliance with rulings and the good functioning of public administrations.

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