Tax complexity index

Lowering tax compliance costs is not a straightforward one-size-fits-all exercise. Compliance costs are unevenly distributed among firms, influenced by several factors. Younger companies often face higher compliance costs due to the learning curve they experience in meeting regulatory requirements. Smaller firms also tend to bear relatively higher costs compared to larger companies. Furthermore, sectors that benefit from multiple special tax rates or specific deductible items (for instance, the energy sector) often face more complex compliance efforts as a result. The performance of Member States also varies, with the Baltic and Nordic countries tending to have lower corporate tax compliance costs.