European Production Tax Barometer 2025

Fourth edition

Scope

As in the two previous editions, the United Kingdom was not included in the scope of the study, as its exit from the single market has exempted it from EU legislative constraints and profoundly altered the economic environment in which it operates.

The Czech Republic joins the barometer for the first time in this fourth edition, following the addition of Austria last year. The inclusion of the Czech Republic is relevant because of the competitiveness and density of its industrial base, which accounts for nearly 38% of its GDP. The country relies on strategic sectors such as automotive, electronics, and metallurgy, supported by a highly skilled workforce and a business-friendly environment for investment. Moreover, its central geographic location in Europe bolsters its integration into industrial value chains, particularly with Germany, its main trading partner. The strength of the CzechRepublic’s economic model thus makes the study of its production taxa-
tion especially relevant.

Building the Indicator

The French-based experts at Forvis Mazars, who coordinated the project, developed a set of specifications detailing the information required to identify and analyze production taxes across the thirteen countries included in the study. They relied on European Regulation No. 549/2013 of 21 May 2013, which defines production taxes, as well as French legal standards, particularly case law from French courts.

The specifications included a list of all existing taxes, levies, and contributions, and identified which of these meet the definition of production taxes. These taxes must satisfy four criteria:

• They are mandatory.
• They are paid by businesses.
• They are levied by public administrations or European Union institutions.
• They are due in relation to production capacity.

The specifications also highlighted areas of ambiguity and provided detailed justifications for the classification of certain taxes. For instance, the vacant commercial property tax is excluded, as it is levied on the ownership of unused buildings and is not considered a cost associated with productive activity. Based on these criteria, Forvis Mazars experts in the twelve other participating countries reviewed Eurostat data and reclassified it where necessary, applying the same analytical framework. The teams compiled a comprehensive list of all taxes in each country and determined, item by item, whether each one qualified as a production tax-providing justification and accounting for the complexity of national tax regulations. This data was then transmitted to Institut Montaigne, which, with the support of HEC Junior Conseil, used it to construct a common indicator allowing for the comparison of total annual production tax revenues between France and the twelve other European countries. This shared indicator is expressed as a percentage of 2023 GDP.

While the findings of our barometer do not significantly diverge from Eurostat’s rankings, they offer a higher degree of precision thanks to an enhanced legal basis for classification.

Methodological Note

While this report provides an unprecedented level of detail, there remains a margin of error in isolating the share of taxes paid by households versus businesses. In some countries, such as Spain and Poland, certain data are missing, making it impossible to definitively exclude household contributions to specific production taxes. In France, some local taxes identified in our specifications as production taxes suffer from a lack of transparency and are not systematically reported to Eurostat