Construction of Personal Income Tax in the European Union. A case study of the Personal Income Tax of five Member States

Abstract

The aim of this article is to spell out and examine the differences in personal incomet Tax construction in the European Union, and also to review the importance of Personal income fax in the fax revenue of Member States. The justification for this stems from the fact that, the European Union countries are well developed and have long tradition of market economy and a better system of taxation. The tax system in these counties is a sort of model that other countries are trying to follow. Five of the Member States have been chosen in this paper as a case study. These countries include France, Greece, Germany, the Netherlands and the United Kingdom. In this paper, I present the generał characteristics of personal income tax, which is followed by the construction of PIT in the European Union countries with special emphasis on the chosen countries. Special attention has been paid here to the subject and object of taxes, the sources of revenue, the cost of earning revenue and fax rates and brackets, as well as tax exemptions and reliefs. Considering the fact that personal income tax plays a very significant role in the tax revenue of Member States, an indebt analysis of tax composition has been carried out in a bid to show its role. The paper closes with a description of the differences in tax construction of the European Union.