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

There are three different types of tax in Scotland:

  • local taxes
  • devolved taxes (partially and fully)
  • 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 - local tax set by the Scottish Parliament which is administered and collected by local authorities, and they retain all of the Non-Domestic Rates 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 also: 

  • established the Devolved Taxes Legislation Working Group with Scottish Parliament officials to review the process for making tax legislation (interim report due in early 2020)
  • published Working Together on Tax with Revenue Scotland, which sets out the guiding principles of our partnership as we work in collaboration to develop and maintain an efficient and effective tax system for Scotland


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