Page 38 - Property Portfolio - October 2019
P. 38

When is your




        tax freedom day?






                                                  pay, it illustrates the general tax burden of each
        By Steven Langford, Partner,              country and how they compare to each other.
        Blevins Franks
                                                  The study calculates a “tax liberation day” for
                                                  each member state – the date on which an
        If you ever had the feeling that you have spent   employee has earned enough to pay off all taxes
        half your working life just paying tax, you are   for the year. It also identifies the average “real tax
        not far wrong. What with income tax, national   rate” for typical workers in each country (gross
        insurance/social security, capital gains tax,   salary minus all tax liabilities).
        VAT, council tax, excise duties and so on, a
        considerable amount of our income goes straight   2019’s report reveals the average tax freedom day
        to the taxman each year.                  across the EU was 12 June, but results ranged
                                                  from 8 April to 19 July – a disparity of over 14
        Even if you are retired, you are still faced with   weeks! Meanwhile, the difference between the
        tax on savings, investments and pensions, not to   lowest and highest real tax rate was more than
        mention the amount payable in VAT each year.   double. Remaining at 44.5%, this year’s average
        Having paid so many taxes all your life, you will   rate broke a four-year trend of slightly declining
        not want to pay more than necessary – that’s why   taxes.
        tax planning plays such an important part in
        protecting your wealth.                   How did Spain fare?
                                                  According to the study, Spain’s tax freedom day
        Defining the tax burden                   fell on 8 June, placing it ninth in the rankings.
        of typical workers in the EU              This means that Spanish employees worked for
        For the last ten years, the Institut Economique   159 days of the year just to pay their tax bill.
        Molinari has been measuring taxes payable across   While this is the same as the last three years, it
        the 28 EU member states. While it focuses on   is a long way off the 19 May tax freedom day
        employees and the tax and social security they   enjoyed back in 2011.




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