Definition: Tax on income and social insurance contributions


Tax on income refers to taxes on income, profits and capital gains. They are assessed on the actual or presumed income of individuals, households or tax-unit. They include taxes assessed on holdings of property, land or real estate when these holdings are used as a basis for estimating the income of their owners.

Taxes on income include:

- taxes on individual, household or tax-unit income (income from employment, property, entrepreneurship, pensions, etc.), including taxes deducted by employers (pay-as-you-earn taxes), other taxes at source and taxes on the income of owners of unincorporated enterprises paid during the income reference period,
- by way of exception, Member States using data from registers, and other Member States for which this is the most suitable approach, may report taxes on "income received" in the income reference year, if it only marginally affects comparability,
- any tax repayment received during the income reference period relating to tax paid on the income received during the income reference period or previous years. This value should be taken into account as a reduction of taxes paid,
- any interest charged on arrears of taxes due and any fines imposed by taxation authorities.

Taxes on income do not include:

- fees paid for hunting, shooting and fishing rights.

Social insurance contributions refer to employees', self-employed, unemployed, retirement and any other contributions (if applicable) paid during the income reference period to either mandatory government or employer-based social insurance schemes (pension, health, etc.).
Commission Regulation (EC) No 1980/2003 of 21 October 2003 implementing Regulation (EC) No 1177/2003 of the European Parliament and of the Council concerning Community statistics on income and living conditions (EU-SILC) as regards definitions and updated definitions

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