ZEW Update 2007 of BAK Taxation Index for Highly Qualified Manpower

Every other year ZEW updates the BAK Taxation Index on behalf of BAK Basel Economics and also constantly extends the geographical area covered. The Index actually compares the effective charges for tax and other deductions for highly qualified workers at 41 locations worldwide.

The effective tax rate on the income of highly qualified workers is calculated using a simulation model. The calculation includes the costs to an employer of providing a highly qualified worker with a certain disposable income after tax and other deductions. A distinction is made between various levels of income, salary components and the marital status of the highly qualified manpower. The BAK Taxation Index also takes account of subsequent taxes and deductions pertaining to the salary paid. This includes in particular the pension entitlements acquired as a result of the social security contributions paid as well as the taxes charged thereto.