1. Item 11: Taxes and social contributions
ESTP course on National Accounts
ESA 2010
Luxembourg, 15 May May Eurostat

2. Distributive transactions
Transactions by which Value Added generated by production is distributed to the “factors of production” => Chapter 4 of ESA 2010 distinguishes:
Current transfers :
Primary distribution of income from production:
Labour => Wages (compensation of employees)
Capital => Profits (Gross operating surplus)
Government =>Taxes on production (less subsidies)
Redistribution (or secondary distribution) of income and wealth
Capital transfers: redistribution of saving and wealth

3. Income distribution NATIONAL ECONOMY Primary distribution
GOVERNMENT
PRODUCERS /
ENTERPRISES
HOUSEHOLDS
Wages
Prod. Subsidies
Dividends & Interests
Prod. Taxes
Contributions
Benefits
Income taxes & Social Security Contributions
Social Security Benefits
Secondary distribution
NATIONAL ECONOMY

4. List of Distributive Transactions
D.1 Compensation of employees
D.2 Taxes on production and imports
D.3 Subsidies
D.4 Property income
D.5 Current taxes on income, wealth, etc.
D.6 Social contribution and benefits
D.7 Other current transfers
D.8 Adjustment for the change in pension entitlements
D.9 Capital transfers

5. The notion of Tax Definition of a tax (ESA 2010 para 4.14 & 4.77):
“compulsory, unrequited payments, in cash or in kind which are levied by general government, by the institutions of the EU or by the rest of the world”
ESA divides taxes into 3 categories:
Taxes on production and imports (D.2)
Taxes on income and wealth (D.5)
Taxes on capital (included in D.9)

6. Taxes on production and imports
Two basic kinds:
Taxes on products (D.21)
VAT (or VAT like)
Taxes and duties on Imports
Excise Duties, other taxes
Other taxes on production (D.29)

7. Subsidies (D.3) Definition in ESA 2010 (para 4.30):
“current unrequited payments which general government or the institutions of the European Union make to resident producers”

8. Subsidies - categories
Like taxes, subsidies are divided into:
subsidies on products (D.31)
other subsidies on production (D.39)
Examples of subsidies?

9. Taxes on income and wealth (D.5)
Two basic kinds:
Taxes on income (D.51)
Incomes (of HH, NPIs and entrepreneurs)
Profits (of corporations)
Capital gains (tax on holding gains)
Lottery or gambling (winners only!)
Other current taxes (D.59)

10. Taxes: Borderline cases
Taxes on products or production?
Taxes or social contributions?
Taxes or sales of services?
local taxes and financing of local services
tolls and fees
case of licenses

11. Accounting Rules Valuation Timing - “liability to pay”
What about taxes never collected ?
=> 3 possibilities depending on sources:
assessments with adjustment by coefficient:
with capital transfer (D.995)
with no capital transfer
cash receipt with time-adjusted series

12. Social contributions and benefits
Schemes for social protection
List of needs that might give rise to benefits (ESA 2010 para 4.84)
In cash or in kind (including transfer of non-market output)
All Contributions (employee, employer; imputed)

13. Social transfers in ESA 2010
3 categories of social transfers:
Net social contributions (D.61), of which:
Employers' actual social contributions (D.611)
Employers' imputed social contributions (D.612)
Households' actual social contributions (D.613)
Households' social contribution supplements (D.614)
Social insurance scheme service charges (D.61SC)
Social benefits, not in kind (D.62)
Social transfers in kind (D.63)

14. EU Institutions Taxes Taxes collected by countries on behalf of EUI
receipts from the common agricultural policy
monetary compensatory amounts levied on exports and imports
sugar production levies and the tax on iso-glucose
customs duties levied on the basis of the Integrated Tariff of the European Union(Taric)
VAT and GNI-based third and fourth EU own resources
based on the levels of their VAT base and their GNI
Not part of D.2, but D.76