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European Countries with the Highest Taxes for Individuals and Entrepreneurs

There are more than 60 countries in Europe, with 27 of these being members of the European Union. Each jurisdiction in Europe has its own economy and tax system which, taken together, define the prestige of the state and its rating on the world market.

Taxes in Europe

If we consider tax obligations, each country in Europe has its internal laws that vary greatly and may be profitable or unprofitable for foreign entrepreneurs and immigrants. In this article, we are going to see who pays the highest income taxes in Europe and which countries set the maximum income tax rates for entrepreneurs, local residents, non-residents, and wealthy people.

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What is the easiest place to relocate to in Europe and beyond? Which country offers the world’s lowest income taxes? In which bank can you open an account remotely? Where can you buy real estate and obtain citizenship at profitable rates? You can get answers to these and many other questions if you book a session with the experts of our international portal.

CONSULTATIONS FROM INTERNATIONAL WEALTH EXPERTS

Tax System of the European Union

Income tax rates in Europe and the EU include direct and indirect obligations that are individually imposed by each country. However, there is a common tax policy standard that all the European Union countries have to comply with to fight tax evasion and avoid double taxation. 

There is a European Commission that provides supervision over compliance with indirect tax requirements by enterprises and trade companies. The main goal of this well-structured economic system is free movement of resources and ensuring equal conditions for all entrepreneurs that generate income in the EU. 

The Highest Individual Income Taxes in Europe

Income tax rates in Europe are not standardized, so they vary considerably. Companies and individuals have an opportunity to use the provided benefits to reduce income tax burden or fully exclude a part of the income from taxable profit.

The majority of EU countries apply a progressive income tax system (the income tax rate increases or decreases depending on the amount of income). Thus, the highest income taxes in Europe are applicable to wealthy individuals, large corporations, and investors. 

Income Tax in EU countries in 2023

Individual income tax rates in EU countries differ in all respects. As a rule, citizens in Europe are taxed on the total world income at the rates set by the country of residence. An individual is considered an EU tax resident if he or she spends more than six months a year in the country.

Here are standard and high individual tax rates as of 2022–2023 for each EU state (in decreasing order):

  1. Individual income tax rate in Finland – up to 56.95%
  2. Individual income tax rate in Denmark – 55.90%
  3. Individual income tax rate in Austria – 55.00%
  4. Individual income tax rate in Sweden – 52.30%
  5. Individual income tax rate in Belgium – 50.00%
  6. Individual income tax rate in Slovenia – 45.00%
  7. Individual income tax rate in the Netherlands – 49.50%
  8. Individual income tax rate in Ireland – 41.00%
  9. Individual income tax rate in Portugal – 48.00%
  10. Individual income tax rate in Spain – 47.00%
  11. Individual income tax rate in Luxembourg – 42.00%
  12. Individual income tax rate in France – 45.00%
  13. Individual income tax rate in Germany – 45.00%
  14. Individual income tax rate in Greece – 44.00%
  15. Individual income tax rate in Italy – 43.00%
  16. Individual income tax rate in Cyprus – 35.00%
  17. Individual income tax rate in Malta – 35.00%
  18. Individual income tax rate in Poland – 32.00%
  19. Individual income tax rate in Latvia – 31.00%
  20. Individual income tax rate in Croatia – 30.00%
  21. Individual income tax rate in Slovakia – 25.00%
  22. Individual income tax rate in the Czech Republic – 23.00%
  23. Individual income tax rate in Estonia – 20.00%
  24. Individual income tax rate in Lithuania – 20.00%
  25. Individual income tax rate in Hungary – 15.00%
  26. Individual income tax rate in Romania – 10.00%
  27. Individual income tax rate in Bulgaria – 10.00%

Read our article on 15 European countries with low taxes and favorable residence conditions.

Who Pays the Highest Income Taxes in Europe?

The highest individual (income) taxes in Europe were set by non-EU members. In 2023, the highest individual tax in Europe is imposed in the following countries:

  • Individual income tax rate in Iceland – 46.25%
  • Individual income tax rate in Switzerland – 40.00%
  • Individual income tax rate in Norway – 38.20%
  • Individual income tax rate in Lichtenstein – 24.00%
  • Individual income tax rate in Serbia – 20%
  • Individual income tax rate in Ukraine – 18.00%

And here are the countries in Europe where individual tax is levied at a minimum rate:

  • Individual income tax rate in Bosnia and Herzegovina – 10.00%
  • Individual income tax rate in Kosovo – 10.00%
  • Individual income tax rate in Macedonia – 10.00%
  • Individual income tax rate in Montenegro – 9.00%

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If you intend to obtain the right to permanent residence in Europe, it would be a good idea to open a bank account there in advance. The experts of our portal will easily help you complete the procedure remotely.

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Which Country in Europe Has the Highest Taxes for Business in 2023

Like many other states, countries in Europe receive a considerable share of profit to the treasury at the expense of the corporate income tax. Company income tax rates are set in the country of their tax residence.

The EU countries and the Organization for Economic Cooperation and Development (OECD) are jointly working to minimize tax benefits for separate companies and average corporate income tax rates. However, countries like Ireland and Luxembourg still offer a profitable corporate tax rate for a number of companies, and large transnational corporations use these jurisdictions to optimize taxes. 

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If you want to minimize business taxes, please consider registration of an offshore company in the safest zones and countries, including Europe. If you want to choose a suitable country for relocation in accordance with your aims and goals, please contact our experts and look at relevant destinations in the catalog of our services.

The Highest Corporate Tax Rates in EU Countries

It is common knowledge that the European Union offers the highest corporate income tax rates. However, it should be clear that the specified tax rate is not always final. The income tax rate set by the law may be much higher in Europe than the effective income tax rate applied after you acquire the right to certain benefits by complying with the conditions set. 

It means that an EU company owner can be actually subject to much lower income taxes than set in laws, but it would be safer to discuss this with your tax advisor.

Here are the corporate tax rates in EU countries set by laws in 2023:

  1. Corporate income tax rate in Malta – 35.00%
  2. Corporate income tax rate in Germany – 30.00%
  3. Corporate income tax rate in France – 26.50%
  4. Corporate income tax rate in Austria – 25.00%
  5. Corporate income tax rate in Belgium – 25.00%
  6. Corporate income tax rate in Netherlands – 25.80%
  7. Corporate income tax rate in Spain – 25.00%
  8. Corporate income tax rate in Luxembourg – 24.94%
  9. Corporate income tax rate in Italy – 24.00%
  10. Corporate income tax rate in Greece – 24.00%
  11. Corporate income tax rate in Denmark – 22.00%
  12. Corporate income tax rate in Portugal – 21.00%
  13. Corporate income tax rate in Slovakia – 21.00%
  14. Corporate income tax rate in Sweden – 20.60%
  15. Corporate income tax rate in Finland – 20.00%
  16. Corporate income tax rate in Estonia – 20.00%
  17. Corporate income tax rate in Latvia – 20.00%
  18. Corporate income tax rate in the Czech Republic – 19.00%
  19. Corporate income tax rate in Poland – 19.00%
  20. Corporate income tax rate in Slovenia – 19.00%
  21. Corporate income tax rate in Croatia – 18.00%
  22. Corporate income tax rate in Romania -16.00%
  23. Corporate income tax rate in Lithuania – 15.00%
  24. Corporate income tax rate in Ireland – 12.50%
  25. Corporate income tax rate in Cyprus – 12.50%
  26. Corporate income tax rate in Bulgaria – 10.00%
  27. Corporate income tax rate in Hungary – 9.00%

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Despite a complex taxation system in the UK and the USA, both countries offer profitable tax conditions for foreign companies that have the status of international ones. There are special zones and states for this where you can pay lower taxes, and the profit derived in another country may be tax-exempt.

Corporate Tax Rates in Europe (Non-EU Members)

Here are the countries in Europe where corporate income tax rates set by laws are the highest in 2023, but they can be reduced under certain circumstances:

  • Corporate income tax rate in Iceland — 20.00%
  • Corporate income tax rate in Switzerland — 14.93%
  • Corporate income tax rate in Norway — 22.00%
  • Corporate income tax rate in Lichtenstein — 12.50%

And here are the countries in Europe where the taxes for businesses are set at the most loyal rates in 2023:

  • Corporate income tax rate in Bosnia and Herzegovina — 10.00%
  • Corporate income tax rate in Kosovo — 10.00%
  • Corporate income tax rate in Macedonia — 10.00%
  • Corporate income tax rate in Serbia — 15.00%
  • Corporate income tax rate in Montenegro — 9.00%

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You can start your business and obtain a residence permit in one of the countries in Europe with the help of experienced advisors on our portal. Use the links above to look at our services provided in each country.

Who Pays the Wealth Tax in Europe?

The wealth tax is a disputable topic, and the majority of countries in Europe have completely abolished it. There is a tax on fortune in Europe, as well as a tax on certain assets. 

The net wealth tax is used in Norway, Spain, and Switzerland. The countries in Europe that have abolished the tax include Austria, Denmark, Finland, Germany, Iceland, Luxembourg, and Sweden. 

Net Wealth Taxes: Where They Are Used in Europe

The tax on all wealth of residents was imposed and preserved by only three countries in Europe:

  • Norway imposes a wealth tax on an individual at a rate of 0.85% if the amount of assets exceeds 152,000 euros.
  • Spain has a progressive taxation system at rates ranging from 0.20% to 3.75% if the individual’s wealth exceeds 700,000 euros. Non-residents pay a wealth tax in Spain only on the local assets they own, while the residents pay the same on the world wealth. 
  • In Switzerland, the net wealth tax is also paid on a sliding scale and is levied on all income in the country and abroad, except for tax on real estate and any other foreign company governed by the individual.

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Get more information on taxes for businesses in different countries in 2023 from our article on countries with the lowest company taxes.

Wealth Tax on Separate Assets

France, Italy, and Portugal are the European countries that impose a wealth tax on separate assets. Thus, if the amount of capital and total wealth of the local citizen does not exceed the limits set, no tax is paid.

  • In 2018, France abolished the net wealth taxation system and set new regulations. Today, the wealth tax covers the international real estate of residents that costs 1.3 million euros or more. Non-residents pay the same wealth tax in France if they own local real estate with an estimated value of at least 1.3 million euros. The rates may reach 1.5% depending on the object.
  • In Italy, you will be subject to a wealth tax of 0.2% which covers the assets located abroad. There is also a 0.76% tax on foreign real estate owned by Italian tax residents.
  • In Portugal, you will have to pay a national wealth tax on real estate that costs 600,000 euros and more. The tax residency status is not taken into consideration in this case, and the rate is 0.7% for individuals and 0.4% for legal entities. If the cost of real estate exceeds 1 million euros, all owners are taxed at the same rate of 1.0%.

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Pay attention to Portugal where you can make profitable investments in real estate and obtain a resident permit quickly and without much hassle!

Best European Jurisdiction to Relocate and Start your Business

The tax rates are the primary factor that influence the choice of a country for permanent residence and company immigration. It is hard to choose the country where to relocate in this or that situation. You need to study all the current laws and make a comparative analysis.

If you want to avoid mistakes, book a session with our experts to get answers to your questions.

  1. You can book a free session with our advisors.
  2. We have professionals from different countries to help you.
  3. We work in the field of private, investment, and business immigration with proven partners, consulting companies, developers, real estate agents, and business registration specialists.
  4. Our experts will not provide services that violate the laws of any state. Our activities are safe and legally transparent!
  5. We cooperate with the largest banks in Europe, Asia, and other continents. We open accounts for individuals and companies, including in offshore jurisdictions and elsewhere to serve onshore and offshore businesses.
  6. All the mentioned services are paid on the 50/50 basis: you make an advance payment before the start of cooperation, and the final amount is transferred by the customer after we have fulfilled your request.

We will find a solution for each client, select a suitable citizenship-by-investment program, provide assistance in tax planning, register a trust/fund/company, and suggest ways to better protect your wealth.

Which country in Europe is a zero-tax jurisdiction?

There is no official tax exemption in any country in Europe. At the same time, there are countries in Europe that are profitable for life and business. One of them is, for instance, Monaco, where no income tax has been levied from local residents since 1869. These benefits do not cover the French that are subject to a progressive tax.

Which country in Europe offers the lowest tax rate?

In 2023, the leader is Montenegro where the individual income tax rate is the lowest in Europe, and it amounts to 9 percent.

Which EU country offers the lowest taxes?

The majority of EU countries have set quite high taxes for individuals and corporations. The most optimal rates can be found in Bulgaria (10%) and Hungary where the income tax is levied at a rate of 9%.

Which country has the highest income tax for business in Europe?

Malta applies one of the highest corporate tax rates in the world that amounts to 35%.

Which country offers the lowest corporate tax rate in Europe?

The lowest taxes for companies in Europe are set in Hungary and Montenegro (9%). Lichtenstein is also popular with foreign investors as it offers a company profit tax of 12.50%. Bosnia and Herzegovina, Kosovo, and Macedonia are also worth noting as the countries that can be selected for relocation: they offer a corporate tax rate of 10.00%.

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