Taxes are paid by individuals and businesses on things like income, property transactions and certain goods and services. The revenues collected from taxes are used to fund public services such as health and social care, education and transport.

You can find out more about taxes in Scotland in our animated video, ‘Raised in Scotland. Spent in Scotland.’ 

 There are three different types of tax in Scotland:

  • devolved taxes (partially and fully)
  • local taxes
  • taxes reserved to the UK

Taxes paid in Scotland are collected by local authorities, Revenue Scotland and HM Revenue and Customs (HMRC), depending on the tax.



We have responsibilities in relation to the following taxes: 

  • Income Tax - some aspects of which are the responsibility of the Scottish Parliament, others the UK Parliament, and which is administered by HMRC
  • Land and Buildings Transaction Tax - set by the Scottish Parliament and administered by Revenue Scotland
  • Landfill Tax - set by the Scottish Parliament and administered by Revenue Scotland
  • Council Tax - set, administered, and spent by local authorities
  • Non-Domestic Rates - set by the Scottish Parliament, administered and collected by local authorities who retain all of the revenue raised locally. 

In addition, the Scotland Act 2016 included powers in relation to the following taxes: 

We are also working with the UK Government on assigning a share of Scottish VAT revenues to the Scottish Budget in the future.

We have recently released the following publications:

  • Scotland’s Framework for Tax which sets out the principles and strategic objectives that underpin our Scottish Approach to Taxation, as well as our approach to decision making, engagement and how we manage and sequence tax policy and delivery around the fiscal cycle. It also includes a programme of work in tax over the course of this parliamentary term (2021 to 2026)
  • policy evaluation which assesses the impacts of Scottish Income Tax in 2018 to 2019 against the four key tests for Income Tax policy as set out in the discussion document The role of income tax in Scotland’s budget (2017)
  • a call for evidence and views on the operation of the Land and Buildings Transaction Tax Additional Dwelling Supplement (ADS). This will be the first stage in the review of the ADS to which the Scottish Government committed in the 2021-22 Programme for Government

Framework for tax

The Framework for Tax is a document for everyone in Scotland. It is designed to be accessible for the public and stakeholders alike.

It sets out the principles and policy objectives that underpin the Scottish Approach to Taxation, which continues to be founded upon Adam Smith’s four principles of taxation:

  • certainty
  • proportionality to the ability to pay
  • convenience
  • efficiency

We have added two new principles to signifying our commitment to engaging and collaborating on tax policy, and designing effective tax policies that minimise the scope for avoidance activities:

  • effectiveness
  • engagement

Taken together, these six principles underpin the Scottish Government’s strategic approach to tax policy-making.


Our approach to tax reflects Adam Smith’s four principles of taxation:

  • certainty
  • proportionality to the ability to pay
  • convenience
  • efficiency

Despite being more than 200 years old, these principles continue to be pillars of sound tax policy making. In addition, the Scottish approach to taxation incorporates our commitment to stakeholder engagement and a firm approach to potential tax avoidance.

The Scottish Government has gained more tax and revenue raising powers through legislation:

Scotland Act 1998 established the Scottish Parliament, devolved powers in relation to local taxes such as council tax and non-domestic rates, and provided for the variation of the basic rate of income tax in relation to the income of Scottish taxpayers.

Scotland Act 2012 amended the 1998 Act by devolving further powers to Scotland, including the ability to set a Scottish Rate of Income Tax and to legislate for and administer taxes to replace UK Stamp Duty Land Tax and Landfill Tax. The 2012 act also introduced a mechanism to devolve further tax powers, including new taxes.

The Smith Commission report, published in November 2014, recommended further devolution over elements of taxation and public spending to the Scottish Parliament. This proposal was taken forward in the Scotland Act 2016, which received royal assent on 23 March 2016.

Scotland Act 2016 extended Income Tax powers by enabling the Scottish Parliament to set rates and bands on non-saving, non-dividend income, for example earnings from employment, pensions and property income. Powers over Air Passenger Duty (now Air Departure Tax) and Aggregates Levy were also included, but the powers are yet to be devolved to the Scottish Parliament.

As part of the implementation of the Smith Commission report, the Scottish and UK governments also agreed a fiscal framework, which includes a mechanism for adjusting the block grant to reflect the tax and social security responsibilities that have been devolved to the Scottish Government. 

Bills and legislation

Scotland Acts

Scotland Act 2016

Scotland Act 2012

Scotland Act 1998

Devolved taxes

Landfill Tax (Scotland) Act 2014

Land and Buildings Transaction Tax (Scotland) Act 2013

Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016

Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Act 2018

Air Departure Tax (Scotland) Act 2017

Local government taxes

View a full list of Council tax: legislation

View a full list of Non-domestic rates: legislation


Email: Central Enquiries Unit

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