lowest taxes in europe 2

Lowest Taxes in Europe

Lowest Taxes in Europe

Some European countries offer relatively low tax rates for both individuals and companies, making them attractive for business and investment. In this article, lawyers from Regulated United Europe offer you a detailed overview of taxation in Europe – a comparison of countries in terms of VAT, corporate income tax, social tax, personal income tax and average salary in Europe, as well as the requirements for tax residency in different countries. Here are a few European countries known for their low taxes.

Lowest Taxes in Europe

Bulgaria

1. Bulgaria

  • Corporate income tax: One of the lowest corporate tax rates in the EU at 10%.
  • Income tax: Fixed rate of 10%.

Ireland

2. Ireland

  • Company Tax: Known for its low corporate tax rate, which is 12.5% for company trading profits.
  • Attractiveness to international business: Many international companies choose Ireland for their European headquarters because of the tax incentives.

Cyprus

3. Cyprus

  • Corporate income tax: Rate 12.5%.
  • Tax incentives for foreign investors: There are special offers, including incentives for non-residents and investors.

Estonia

4. Estonia

  • Unique tax system: Corporate tax is only payable when profits are distributed. This can be favourable for companies reinvesting their profits.
  • Income tax: Fixed rate of 20%.

What to consider when starting a company in Europe

  • Total tax burden: It is important to consider not only corporate taxes, but also other taxes and levies such as VAT, labour taxes and social contributions.
  • Double taxation: Check the double taxation treaties between your country and the country in which you plan to invest and start a business.
  • Country reputation: Some low-tax jurisdictions may be perceived as “tax havens”, which can affect reputation and subsequent business behaviour.

Before making decisions about registering a business or investing in a particular jurisdiction, it is important to conduct a thorough analysis and, if necessary, consult with professional tax and legal advisors.

Lowest corporate tax in Europe

Some European countries offer particularly low corporate taxes, thus attracting international entrepreneurs and investment. Here are some of the countries with the lowest corporate tax rates in Europe:

Ireland

1. Ireland

  • Corporate Tax: The corporate tax rate is 12.5% for trading income, which is one of the lowest rates in western Europe. Ireland is known as the location of the European headquarters of many international companies due to its tax policy.

Cyprus

2. Cyprus

  • Corporate Income Tax: 12.5% rate. Cyprus also offers a number of tax incentives for foreign investors and non-residents, making it a popular choice for international business.

Bulgaria

3. Bulgaria

  • Corporate Tax: Bulgaria’s corporate tax rate is 10%, making it one of the countries with the lowest corporate taxes in the EU.

Estonia

4. Estonia

  • Corporate income tax: The tax rate is 20%, but tax is only payable on profit distributions. There is no capital gains tax.

European countries with the highest percentage of foreign ownership of firms

Statistics on foreign firm ownership in European countries can vary over time and are influenced by a variety of factors including economic policies, investment climate and global trends. However, based on historical data and economic reports, some European countries have traditionally attracted a high percentage of foreign firm ownership. Here are some examples:
Luxembourg

1. Luxembourg

  • Attractiveness for foreigners: Luxembourg is known as a major financial centre with a favourable tax policy and international orientation. A large percentage of companies here are owned by foreign investors.

Netherlands

2. Netherlands

  • Foreign investment: The Netherlands has traditionally attracted a significant amount of foreign investment due to its stable economic position, strategic location and favourable investment climate.

Switzerland

3. Switzerland

  • International companies: Switzerland attracts many foreign companies due to its political stability, high level of confidentiality and favourable tax environment.

UK

4. UK

  • Foreign capital: The UK, particularly London, is a major financial centre and has traditionally attracted a significant amount of foreign investment in its businesses.

Ireland

5. Ireland

  • International Headquarters: Ireland is a popular location for international headquarters and foreign companies due to its low corporate tax rate and other investment incentives.

Estonia

6. Estonia

  • The highest percentage of foreign ownership of companies: Thanks to the e-Residency programme, more than 15% of Estonian companies are founded by foreigners, and the Estonian treasury received over 200 million euros in taxes from their owners last year.

What to consider for non-dom status persons

  • Changes in policy and legislation: The percentage of foreign ownership of firms may change in response to political and economic changes, including Brexit, changes in tax legislation and international agreements.
  • Market dynamics: Global economic trends such as trade wars, pandemics and financial crises can also affect the attractiveness of countries for foreign investment.
  • Data and statistics: For up-to-date information and a more detailed understanding, it is worth referring to recent economic reports, statistics and analyses.

Lowest corporate tax in Europe

Taxes in Europe are paid by all individuals and legal entities who earn money in one of the countries on its territory. Foreigners with tax residency status are obliged to pay taxes on all income received both in and outside the EU state – it is assigned to immigrants who have spent at least 183 days in the jurisdiction during the year and meet other mandatory conditions. The peculiarity of the EU legislation is that each state has the right to set the amount of rates at its own discretion. Citizens of European countries may benefit from a double taxation treaty if the jurisdictions of citizenship and residence have concluded such a treaty.

The EU as an organisation does not have a single law regulating the payment of fees, but this area is controlled by separate narrowly focused directives and conventions. This article describes the types of taxes in the EU states, the differences between the fees for individuals and legal entities, and the requirements for applicants who wish to obtain tax residency status in Europe in 2023.

Types of taxes in European countries

Taxes in Europe are set by the government of each individual jurisdiction and therefore vary from state to state. The EU legislation fixes harmonising minimum rates for some types of levies, such as excise duties. Taxes are paid depending on the status of the applicant and the country of origin of his income. Companies pay contributions directly to the regulatory authority of the state in which they are located. Individuals can make payments personally, but in the case of employment, the employer usually does it instead. A stable rate or progressive tax may be used. Types of taxes in the EU and other European countries that are paid by both citizens and foreigners:

  • Income taxes for individuals. The country in which the applicant earns income or is a tax resident may levy income tax. The tax is levied on wages, pensions, allowances, profits from property, capital gains. If a foreigner works in an EU state and receives a salary there, but does not have the status of its tax resident, the tax will be calculated, but will not have to pay for income that accrues abroad. If such a person becomes a tax resident of one of the EU countries, he/she will have to pay tax on profits earned in the other state.
  • Corporate Taxes. Businesses are required to pay a levy in the state in which they are registered and operate. Taxation rules in European countries are set by national governments and are different for each particular jurisdiction. A company that is a resident of a state is obliged to pay a levy on income received on its territory and abroad. A foreign business makes deductions only from activities within the country.
  • VAT. According to European legislation, all member states of the Commonwealth must set a value added tax with a minimum standard rate of 15 per cent and a reduced rate of 5 per cent. The final amount of the tax is determined by the government of a particular state. VAT is always included in the price of goods and sellers are required to include it on the fiscal cheque. Value Added Tax is paid on every sale and goes to the state budget, but from its amount the entrepreneur has the right to deduct all previously paid fees.
  • Harmonised excise duties. These are indirect charges that are actually paid by the end consumer of the goods and that are directed to the budget of the state where the transaction takes place. Under EU taxation rules, excise taxes are imposed on the sale of alcohol, tobacco and electricity. The Commonwealth sets a minimum rate for such levies, but each jurisdiction has the right to increase it.
  • Social levies. This is a compulsory or voluntary tax paid by employees, employers and the self-employed to the state budget in order to receive benefits (sickness benefits, pensions and others) in the future. In Europe, there is no uniform amount of social levies that residents need to pay, but at one point in time a person may be subject to security in only one country – often where he or she works. A citizen of one EU jurisdiction is entitled to continue receiving unemployment payments or other benefits even if he or she moves to another commonwealth state.

In some countries, residents pay additional fees – for example, environmental or transport tax, which is paid annually by the owner of a motor vehicle. Citizens of such countries as Austria, Germany, Finland need to pay church tax if they are parishioners of a temple – the money is first received by the fiscal authority, and then it is redirected to a particular diocese.

Taxation of individuals

Generally, a person who has lived in the jurisdiction for at least 6 months in the last year becomes a tax resident. However, sometimes this status is awarded based on the applicant’s permanent address in the jurisdiction or the location of the centre of his/her life interests. Due to the simple procedure of obtaining the status of tax resident in some cases applicants have to pay taxes to the budget of two countries at the same time, and therefore the EU states have signed treaties on the elimination of double taxation. In addition, a member of the European Union may have such agreements with non-EU jurisdictions.

On what income individuals pay taxes

Under EU law, locals and foreigners pay a levy only on income that is taxable. In Europe, individuals pay taxes on the following categories of income:

  • Salary. Income tax applies to wages, which is progressive in many countries. The lowest tax rate on wages in the EU is set in Bulgaria and Romania – 10%. The highest taxes in Europe are paid by residents of Finland – here the collection can reach 56.5 % of profit. As a rule, the payment is imposed on the employer.
  • Property, inheritance, gift. This type of deductions can be paid including on animals, cryptocurrency and cars. In some countries, the tax is not applied at all or is deducted at the income tax rate. Usually, a progressive scale of assessments is established on property, inheritance and gifts. In Bulgaria, the minimum rate of such tax is 0.4 per cent, and the highest (87.6 per cent) is paid in Spain, but this is not relevant for all regions of the jurisdiction. The levy is paid personally by the individual.
  • Dividends. The lowest taxes on dividends in Europe in 2023 are set by the legislation of Greece, where the rate is 5%. The highest tax is paid by residents of Denmark – 42 %. The fee for dividends received is paid personally by an individual.
  • Capital gains of a natural person. In Belgium, Czech Republic, Luxembourg, Slovakia, Slovenia, Estonia and Switzerland, the levy is only payable under certain statutory conditions. The lowest rate in 2023 is 15 per cent in Greece and Hungary. In Denmark, income tax is applied to capital gains, which reaches 42% and is the maximum for this category of income for individuals. The levy is paid personally by the individual.

Taxation of legal entities

A company that is registered in a European country pays contributions on profits earned both in that jurisdiction and abroad. A foreign business is obliged to make contributions only on income derived from activities carried out in the state. Legal entities pay the following types of fees:

  • Taxes. All companies pay corporate income tax. The lowest tax rate is set in Hungary at 9%. One of the highest tax rates for companies is set in France – 25% of profit. Businesses are also obliged to pay VAT – the lowest rate of VAT is set in Luxembourg at 16% and the highest in Hungary at 27%.
  • Contributions. The lowest rate of social security tax paid by employers on behalf of their employees is 1.77% in Lithuania. The largest amount of contributions paid by employers in Slovakia is 35.2 %.
  • Duties. A number of European countries are included in the customs union, where duties are not applied. However, legal entities are required to pay such duty when importing goods from abroad. The amount of duty is calculated based on the origin of the goods, their value and the applicable customs tariff.

How tax is paid on income of foreign branches

A branch of a company is an establishment that is operated from abroad. In such a case, the payer of corporate tax and VAT is the foreign business. Accounting records of the financial activity of the branch can be kept in different ways – if the branch of the company on the territory of Europe is dependent, all reporting is made in aggregate, and if it is recognised as independent, its employees make separate reports, which are later included in the general balance sheet of the firm.

Cheapest corporation tax in Europe in 2023

When choosing a country to move to or start a company, foreigners often tend to choose jurisdictions with the most favourable taxation. The lowest income taxes in the EU states are presented in the table below:

Tax Rate in % Countries
Income 10 Bulgaria, Romania
Corporate 9 Hungary
Standard VAT 16 Luxembourg

How to become a tax resident in an EU country

Tax residency in a European country can be obtained by persons permanently residing in the territory of the country, accordingly, for this purpose the applicant needs to obtain a residence permit or passport of such jurisdiction. This can be done through one of the available migration programmes.

Lowest corporate tax in Europe

Individuals pay the most tax in Denmark, France and Austria, while the lowest income tax rates in Europe are in Hungary, Estonia and the Czech Republic.

Payment of taxes

Most European countries have introduced a progressive tax payment structure, i.e. the levies increase with the growth of wages. The rates and the number of categories vary greatly from country to country.
Payment of taxes
Income tax rates in Europe

The highest personal income tax rates among the Organisation for Economic Co-operation and Development (OECD) countries are imposed in Denmark – 55.9%, France – 55.4% and Austria – 55%.

In Spain this indicator is 54%, in Belgium – 53.5%. The maximum rates are very high in Finland, Portugal and Sweden.

Country tax rate
Flag of Denmark Denmark 55,9%
franceFrance 55,4%
Flag of AustriaAustria 55%
spain1Spain 54%
Flag of BelgiumBelgium 53,5%
Flag of FinlandFinland 53,4%
Flag of Portugal 2Portugal 53%
Flag of SwedenSweden 52%
Flag of Slovenia 1Slovenia 50%
netherlands 1Netherlands 49,5%
Flag of IrelandIreland 48%
Flag of GermanyGermany 47,5%
Flag of ItalyItaly 47,2%
Flag of IcelandIceland 46,3%
Luxembourg 45,8%
uk1UK 45%
Flag of SwitzerlandSwitzerland 44,8%
Flag of GreeceGreece 44%
Flag of TurkeyTurkey 40,8%
Flag of NorwayNorway 39,5%
PolandPoland 36%
LithuaniaLithuania 32%
Flag of LatviaLatvia 31%
Flag of Slovakia 2Slovakia 25%
Czech RepublicCzech Republic 23%
estonia 1Estonia 20%
Flag of HungaryHungary 15%
Bulgaria flagBulgaria 10%

Countries with low taxes Europe

 

The lowest income tax rates in Europe are in Hungary – 15%, Estonia – 20%, Czech Republic – 23%.

Each country sets its own amount of levies, but there are common standards that must be fulfilled throughout the European Union.

Social tax is a direct tax. Basically, the purpose of social tax is to ensure that a socially insured person is entitled to receive certain services from the state.

Services may include the following:

  • the right to receive an old-age pension
  • disability pension
  • survivor’s pension
  • sick pay
  • maternity benefits
  • unemployment benefits
  • funeral allowance

Accordingly, social tax includes payments for different purposes. For example, payments for the accumulation of pensions, maternity benefits, sickness, disability, incapacity for work and unemployment benefits (insurance).

Tax payers are: employers, employees, self-employed persons and persons who voluntarily pay social tax.

For employees and employers, the object subject to tax is wages. For self-employed persons, the object subject to tax is a certain amount, according to the legislation.

Usually the employer withholds part of the tax (the part of the tax that the employee pays) from the wages. The employer also pays an additional part of the tax for the employer.

In most cases, social tax must be paid once a month. In most countries, the amount of social tax must be reduced by the amount of personal income tax.

Basically, the higher the amount of social tax paid, the higher the social security of the taxpayer (e.g. the amount of old age pension depends on the amount of social tax paid).

The name of social tax varies from country to country. For example, in the UK it is called “National Insurance”, in Ireland it is called “Pay Related Social Insurance (PRSI)”, in other countries it is called “social insurance”.

The average social tax rate in the European Union is 34%.

In Denmark, the tax rate is relatively low mainly because of the high personal income tax.

In the Netherlands, social tax is part of income tax.

Table of social taxes for different European countries, showing the tax rate in per cent:

Country Tax rate (%)
1 Flag of DenmarkDenmark 14.00
2 Flag of IrelandIreland 14.75
3 malta1Malta 20.00
4 Luxembourg 25.94
5 Flag of FinlandFinland 28.00
6 netherlands 1Netherlands 28.81
7 Flag of Croatia 1Croatia 30.70
8 Lithuania 1Lithuania 30.98
9 Bulgaria flagBulgaria 31.40
10 Flag of SwedenSweden 31.42
11 Flag of AustriaAustria 32.00
12 estonia 1Estonia 33.00
13 PolandPoland 33.00
14 Flag of Cyprus 2Cyprus 34.00
15 Flag of LatviaLatvia 34.09
16 Flag of Portugal 2Portugal 34.75
17 spain1Spain 37.25
18 Flag of Slovenia 1Slovenia 38.20
19 Flag of GermanyGermany 39.00
20 Flag of RomaniaRomania 39.95
21 uk1UK 40.00
22 Flag of GreeceGreece 40.06
23 Czech RepublicCzech Republic 45.00
24 Flag of HungaryHungary 45.50
25 Flag of BelgiumBelgium 48.07
26 Flag of Slovakia 2Slovakia 48.60
27 franceFrance 50.00
28 Flag of ItalyItaly 50.00

These data show the diversity of social tax rates for countries in Europe. The lowest social tax rates are in Denmark and Ireland, while the highest rates are in France and Italy.

Average salary in Europe 2023-2024

This block of the article about taxation in the European Union presents a ranking of European countries by average monthly salary after all taxes. This is the average income that employees receive in hand (net income). It is important to take this into account, because in some countries workers may receive less in hand, but pay high taxes, which are then returned to them in the form of some services from the state (free medicine, education, etc.). In countries with liberal economies, income may be higher, taxes less, but with a lot of money workers spend large sums on all the things that in socially orientated economies may not have to pay for at all. The current ranking of average salaries does not take all these factors into account, we are talking exclusively about the nominal average salary that the average citizen receives in hand (net salary). It should also be borne in mind that this rating reflects the official net salary, and in some countries with a huge shadow sector, the real average salary may be higher.

Statistics show that the highest incomes are in Scandinavia and Switzerland. The lowest salaries are in the countries of Eastern and South-Eastern Europe. Among the EU countries, Bulgaria and Romania are traditionally the poorest in terms of salaries.

The list of European countries by average monthly salary is based on data from the IMF, the World Bank and national statistical agencies. All data are converted to Euros at the exchange rate at the time of publication. Average salaries are given both for EU countries and for other countries within Europe.

Country Average monthly salary, €
1 Flag of SwitzerlandSwitzerland 4 902
2 Flag of DenmarkDenmark 3 914
3 Flag of NorwayNorway 3 795
4 Luxembourg 3 573
5 Flag of IcelandIceland 3 221
6 Flag of AustriaAustria 3 104
7 Flag of IrelandIreland 3 041
8 Flag of GermanyGermany 2 970
9 franceFrance 2 791
10 Flag of SwedenSweden 2 770
11 Flag of FinlandFinland 2 509
12 uk1UK 2 454
13 Flag of BelgiumBelgium 2 442
14 Flag of San MarinoSan Marino 2 390
15 netherlands 1Netherlands 2 152
16 spain1Spain 2 039
17 Flag of ItalyItaly 1 752
18 Flag of Cyprus 2Cyprus 1 658
19 Flag of Slovenia 1Slovenia 1 363
20 Czech RepublicCzech Republic 1 250
21 estonia 1Estonia 1 214
22 Flag of GreeceGreece 1 116
23 Flag of Portugal 2Portugal 1 110
24 lithuaniaLithuania 1 059
25 Flag of LatviaLatvia 1 050
26 Flag of MaltaMalta 1 021
27 PolandPoland 1 002
28 Flag of Croatia 1Croatia 974
29 Flag of HungaryHungary 950
30 Flag of Slovakia 2Slovakia 919
31 Flag of RomaniaRomania 785
32 Flag of MontenegroMontenegro 706
33 Bulgaria flagBulgaria 665

Capital Gains Tax in Europe is a tax levied on income derived from the sale of assets such as shares, bonds or real estate. Rates and conditions vary from country to country, reflecting the different national policies and economic strategies of EU countries. In some European countries, capital gains tax is a significant source of revenue, while in others it may be reduced or not applied at all in certain cases.

Countries with the highest capital gains tax rates:

  1. Denmark: One of the countries with the highest capital gains tax rates, which can reach over 40% depending on the amount and type of investment.
  2. France:Also has high rates, especially when social contributions are added to capital gains tax, the total can exceed 30%.
  3. Ireland: Capital gains tax rates can be as high as 33 per cent.

Countries with the lowest capital gains tax rates:

  1. Czech Republic: Some forms of capital gains may be taxed at a reduced rate or exempt from tax altogether.
  2. Slovakia: Offers relatively low rates and tax planning opportunities.
  3. Estonia: In Estonia, the capital gains tax rate is equal to income tax and is 20 per cent, and some forms of capital gains are exempt from tax.

Features of capital gains tax in Europe:

  • Time of holding: In some countries, the tax rate depends on the time of holding the asset. Long-term investments may be taxed at a lower rate.
  • Benefits and exemptions: Some countries offer incentives for small businesses, retirees, or when reinvesting proceeds in certain assets.
  • Regulatory differences: Tax systems and regulations can vary significantly, even within the European Union, making individual tax planning important.

Conclusion

Capital gains tax in Europe presents a complex and diverse picture. Investors and asset owners need to consider local conditions and regulations and look for tax optimisation opportunities. Depending on the country, investment size and personal circumstances, an effective tax strategy can significantly reduce the overall tax burden and increase the net return on investment. Consultation with a tax professional familiar with international tax laws and practices is recommended for accurate planning and understanding of all nuances.

Lowest VAT in Europe 2023-2024

Some entrepreneurs do their tax planning based on VAT rates, so we have summarised the information in a table. It is important to distinguish between VAT in EU member states and VAT in other European countries.

The difference is that VAT legislation in EU countries should be harmonised with the EU VAT Directive 2006/112/EC of 28.11.2006. This directive is based on the following principles:

  • value added tax is imposed on transactions involving a VAT payer in the territory of an EU member state, as well as on imports of goods into the EU territory. Import of goods from an EU member state to another EU member state is subject to VAT in the country where the goods will be used;
  • the place of supply of goods for intra-EU sales is recognised as the country where the purchaser of the goods is located. In the case of deliveries from non-EU countries, import VAT is levied in the country where the goods have been cleared and released into free circulation;
  • the moment when the obligation to charge VAT arises is the moment when the purchaser actually receives the goods or services. The moment an invoice is drawn up from a supplier is not considered to be such a moment;
  • the VAT rate in EU countries should be at least 15% and has no maximum limit. Currently, the minimum VAT rate in the EU is in Luxembourg (17%) and the maximum VAT rate is in Hungary (27%). At the same time, countries may have 2 special reduced VAT rates for a limited list of goods and services listed in the Directive, and the minimum of them must not be less than 5%, exceptions on this point apply only to Spain, Italy and Luxembourg;
  • The Directive provides for cases in which certain types of goods and services are fully exempt from VAT. By default, any export from an EU country, regardless of the destination, is subject to a refund of previously paid VAT in connection with the production of goods sent for export;
  • VAT refund in the EU – the most extensive clause of the Directive, which provides for the possibility to refund in the country of registration VAT that was paid in another EU member state;
  • distance sales from the EU via the internet or a catalogue are subject to VAT in the country from which the goods are sent. However, if such sales to a certain country reach the limit set by that country, it is necessary to register as a VAT payer in that country. For example, in Belgium such limit is 35,000 euros. If the volume of distance sales to Belgium exceeds this limit, the sending company must obtain a Belgian VAT number.

The EU allows you to check the VAT number of a European company. This can be done via a special service on the official EU website, indicating the country of receipt of the VAT number and the VAT number itself.

VAT number

Value Added Tax Number – a unique number assigned to a legal entity when registering as a value added tax payer. In EU countries it starts with two letters of the country code, the remaining symbols are digits, and the number of digits may vary from country to country.

Current value added tax (VAT) rates in European countries

 

Country EU membership Basic rate of VAT Reduced VAT rate Minimum threshold for registration as a VAT payer
Austria Yes 20% 13%, 10%, 0% Annual turnover from 30 000 EUR
Albania No 20% 0% Annual turnover from 5 000 000 lek (40 000 EUR)
Andorra No 4,5% 9,5%, 1%, 0% Compulsory registration
Belgium Yes 21% 12%, 6%, 0% Mandatory registration, but for distance selling the threshold is 35,000 EUR
Bulgaria Yes 20% 9%, 0% Annual turnover from BGN 50,000 (EUR 25,500), but other thresholds for some activities
Bosnia and Herzegovina No 17% 0% Annual turnover from 50,000 convertible marks (27,000 EUR)
UK Yes 20% 5%, 0% Annual turnover from £83,000 (95,000 EUR)
Hungary Yes 27% 18%, 5%, 0% Mandatory registration except for distance selling
Germany Yes 19% 7%, 0% Turnover for the previous year – from 17 500 EUR and expected turnover for the current year – from 50 000 EUR
Gibraltar No 0% No No
Greece Yes 24% 13%, 6%, 0% Annual turnover from 10 000 EUR
Denmark Yes 25% 0% Annual turnover from DKK 50,000 (EUR 6,700)
Ireland Yes 23% 13,5%, 9%, 4,8%, 0% Annual turnover of 75,000 EUR or more, of which 90 per cent is turnover from trading activities; otherwise the threshold for registration is 37,500 EUR
Iceland No 24% 11%, 0% Compulsory registration
Spain Yes 21% 10%, 4%, 0% Compulsory registration
Italy Yes 22% 10%, 5%, 4%, 0% Compulsory registration
Cyprus Yes 19% 9%, 5%, 0% Annual turnover from 15 600 EUR
Latvia Yes 21% 12%, 5%, 0% Annual turnover from 50 000 EUR
Lithuania Yes 21% 9%, 5%, 0% Annual turnover from 45 000 EUR
Liechtenstein No 8% 3,8%, 2,5%, 0% Annual turnover from 100,000 francs (86,700 EUR)
Luxembourg Yes 17% 14%, 8%, 3%, 0% Compulsory registration
Macedonia No 18% No Annual turnover from 1,000,000 denarii (16,600 EUR)
Malta Yes 18% 7%, 5%, 0% Compulsory registration
Moldavia No 20% 8%, 0% Annual turnover from 600 000 lei (30 300 EUR)
Netherlands Yes 21% 6%, 0% Compulsory registration
Norway No 25% 15%, 12%, 0% Annual turnover from NOK 50,000 (EUR 5,300)
Poland Yes 23% 8%, 5%, 0% Annual turnover from PLN 200,000 (EUR 46,700)
Portugal Yes 23% 13%, 6%, 0% Compulsory registration
Romania Yes 19% 9%, 5%, 0% Annual turnover from 65 000 EUR
Serbia No 20% 10%, 0% Annual turnover from 8,000,000 RSD (67,800 EUR)
Slovakia Yes 20% 10%, 0% Annual turnover from 49 790 EUR
Slovenia Yes 22% 9,5%, 0% Annual turnover from 50 000 EUR
Finland Yes 24% 14%, 10%, 0% Annual turnover from 10 000 EUR
France Yes 20% 10%, 5,5%, 2,1%, 0% Compulsory registration
Croatia Yes 25% 13%, 5%, 0% Annual turnover from 230,000 kuna (31,200 EUR)
Montenegro No 19% 7%, 0% Annual turnover from 18 000 EUR
Czech Republic Yes 21% 15%, 10%, 0% Annual turnover from CZK 1,000,000 (EUR 39,000)
Switzerland No 7,7% 3,7%, 2,5%, 0% Annual turnover from 100,000 francs (86,700 EUR)
Sweden Yes 25% 12%, 6%, 0% Compulsory registration
Estonia Yes 22% 9%, 0% Annual turnover from 40 000 EUR

 

Tax residence in Europe – expat taxes

Tax residency in Europe in a low tax jurisdiction offers the opportunity to significantly reduce the fiscal burden, however, before choosing a country for residency, it is recommended to familiarise yourself with the current income tax rates in European countries.

The most favourable conditions for individuals are provided in the following European countries:

European country Peculiarities of income tax accrual Standard rate of income tax
Andorra Tax residents are taxed on all worldwide income. However, there are no taxes on wealth, gift, inheritance, capital gains (except for capital gains from buying and selling property in Andorra). Since 2015, a progressive income tax system has been introduced (some of the lowest taxes in Europe): up to 24,000 EUR – 0% (for non-residents 10%); 24,001 – 40,000 EUR – 5%; from 40,001 EUR – 10%. Income tax is withheld from married couples on amounts over 40,000 EUR at the rate of 10%. Tax is also charged on interest from bank deposits, but on amounts exceeding 3,000 EUR. Tax on capital gains from the sale of real estate is 15%, but every year the rate decreases, and from the 13th year of ownership of the property can be sold without incurring fiscal obligations. 10%
Bulgaria Tax residents of Bulgaria bear fiscal obligations on worldwide income. The country’s flat income tax rate is one of the lowest in Europe – only 10%. In addition to income tax, Bulgaria applies state insurance contributions: social and health insurance: social insurance – 24.7 to 25.4%, where 14.12 to 14.82% is paid by the employer and 10.58% by the employee; health insurance – 8%, where 4.8% is paid by the employer and 3.2% by the employee. There is no capital gains tax, but there is a property tax. The income tax at 10% makes Bulgaria the lowest taxed country in Europe. 10%
Hungary The income tax rate in this European country is 15%. Hungary also withholds social tax at 13% and social security contribution at 18.5%. The general inheritance and gift tax rate in this European country is 18%, and a favourable tax rate of 9% applies to residential property. Donations between direct relatives are exempt from taxation. 15%
Gibraltar The rate of income tax depends on the system chosen: surcharge or gross income. The allowance system provides for tax on income minus allowances, with the following rates applying: first £4,000 – 16%; next £12,000 – 19%; thereafter – 41%. System based on gross income: first £10,000 – 8%; next £7,000 – 22%; thereafter up to £25,000 – 30%. Then the tax rate for income over £25,000: first £17,000 – 18%; next £8,000 – 21%; next £15,000 – 27%; next £65,000 – 30%; anything above that – 27%. Gibraltar also has social security contributions: 10% of an employee’s gross income, with a minimum of £12.10 and a maximum of £36.30 per week; 20% of an employer’s gross income, with a minimum of £28.00 and a maximum of £50.00 per week; 20% of a self-employed person’s gross income, with a minimum of £25.00 and a maximum of £50.00 per week. There is no such tax liability: VAT, on wealth, on legacy, on estates, on dividends, on gifting and no social contributions. It should be noted that income of £11,450 is not subject to income tax. In addition, the country applies a variety of deductions that reduce the fiscal burden and create conditions for Gibraltar to retain the status of the territory with the lowest taxes in Europe for a long time to come. between 8 per cent and 30 per cent
Cyprus Cyprus is a jurisdiction with one of the lowest corporate tax rates in Europe (12.5%). In the Republic, tax residents pay income tax on a progressive scale (on annual income): up to 19,500 EUR – 0%; 19,501 – 28,000 EUR – 20%; 28,001 – 36,300 EUR – 25%; 36,301 – 60,000 EUR – 30%; from 60,001 EUR – 35%. In addition to income tax, a special defence contribution is withheld in Cyprus. It applies only to dividends (17%), interest (in most cases 30%) and rental income. However, having a special non dom status exempts from paying taxes on dividends, on interest from deposits, on rental income and the defence levy. There is no tax on inheritance, immovable property, capital gains (except on property transactions) in Cyprus. These various incentives and deductions increase the attractiveness of this jurisdiction in Europe. 0 to 35%
Lithuania Lithuanian residents pay tax at the rate of 20% on income not exceeding 101,094 EUR per calendar year in 2023 and at the rate of 32% on everything above that, for income from employment, for payments to members of the management or supervisory board, for income received under copyright contracts (received from a company that is also the employer of an individual), for income under a civil law contract received by the manager of a small partnership that is not a member. Dividends are taxed at the rate of 15% (but the legislation provides for preferential treatment for certain companies). In this European country there is no capital gains tax, inheritance tax is not withheld from close relatives, there is no gift tax or luxury tax. Lithuania applies a social contribution – from 19.5%, which includes health insurance. 20% to 32%
Liechtenstein Liechtenstein has a very loyal, progressive income tax system, which makes the Principality practically the lowest in Europe. The following annual income is exempt from income tax: a natural person’s income of CHF 15,000; a single parent’s income of CHF 22,500; and a married couple’s income of CHF 30,000. The maximum income tax rate is 8%, which applies to annual income above CHF 200,000 for a single individual, above CHF 300,000 for a single parent and above CHF 400,000 for a married couple. But it must be taken into account that this European principality has a communal tax, which takes the form of a surcharge (from 150% to 180%) to the national income tax. The decision to increase the fiscal burden is made annually by the local government. The presence of the communal tax increases the effective burden on personal income from 2.5% to 22.4%. The Principality has no inheritance, estate or gift taxes, but there is a capital gains tax (3 to 24% depending on the amount) and social contributions (4.7% pension contribution and 0.5% unemployment insurance). 1 to 8 per cent
Slovakia Current income tax rates: the tax base exceeding the subsistence minimum by 176.8 times (i.e. up to 38 553.01 EUR) is taxed at the rate of 19%, everything more – 25%; dividends – 7%; capital gains – 19%. There are no local taxes on personal income in this European country. 19%/25%
Montenegro Residents pay tax on worldwide income from any source, non-residents – only on income related to a permanent establishment in Montenegro, as well as on royalties, interest and from the rental of local immovable property. From 1 January 2022, this European country has a progressive taxation scale: up to 700 EUR (gross) – no tax; from 701 to 1,000 – 9%; from 1,001 – 15%. Entrepreneurs pay tax at the following rates: from 8,400.01 to 12,000 EUR – 9%; from 12,000.01 EUR – 15%. A few years ago, the 9% income tax rate was the lowest in Europe, but the progressive scale has levelled this advantage, but Montenegro continues to be an attractive jurisdiction for tax residency. 9%/15%
Czech Republic Since 2021, the Czech Republic has introduced a progressive taxation system for personal income: up to CZK 1,867,728 (~78,420 EUR) – 15%; anything above that – 23%. The income tax rate of 15% corresponds to the European average. 15%/23%
Switzerland In Switzerland, income tax is withheld at 3 different levels: federal, cantonal and municipal. Direct federal income tax in Switzerland is calculated on a progressive scale and ranges from 0.77% to 11.5% (over CHF 769,700).  But cantons and municipalities can decide on their own income tax rates. Therefore, in some regions of the country, taxes for individuals are relatively low. For example, the effective tax burden on personal income in the canton of Zug is 22.22 per cent, in Appenzell-Innerrhoden 23.82 per cent, and in Obwalden 24.3 per cent. On the other hand, the income tax rate in the canton of Geneva is much higher at 44.75 per cent. from 22.22%
Estonia As in most other European countries, in Estonia residents pay taxes on all income, while non-residents pay taxes only on profits earned in the country. The standard income tax rate is 20% 20%

How to obtain tax residency in Europe

In order to pay low taxes in Europe, the person concerned needs to obtain a residency status in the desired country. Usually, to become a tax resident, it is necessary to fulfil a number of conditions, including living in the country for at least 183 days during the year. However, it should be noted that in some countries the requirements are more loyal, and it is possible to obtain favourable tax residency in Europe even earlier.

Country Options for obtaining tax residency in Europe
Andorra Staying more than 183 days in a calendar year. Presence of a centre of activity (business) in the territory of the country.
Bulgaria Having a permanent address in Bulgaria. Residence in the country for more than 183 days in any 12-month period. In this case, the individual becomes a tax resident of Bulgaria in the calendar year in which the 183rd day is exceeded. Presence of a centre of vital interests (family, property, job, business).
Hungary Staying in Hungary for at least 183 days in a calendar year.
Gibraltar Residence of at least 183 days in any tax year and more than 300 days in the aggregate in 3 consecutive assessment years.
Cyprus Accommodation for 183 calendar days or more. The day of departure does not count as a day of residence, but the day of arrival does. Arrival and departure in Cyprus are also counted as one day. The 60 days rule applies if the individual fulfils the following requirements: does not reside in any other state for more than 183 days; is not a tax resident of other states; resides in Cyprus for more than 60 days; has economic interests (business, housing) in Cyprus.
Latvia It is possible to become a tax resident of this European country if an individual fulfils any of the following criteria: registered residence in Latvia; stay in Latvia for more than 183 days in any 12-month period
Lithuania Permanent residence during the tax period in this European country. Having personal, social or economic interests in Lithuania. Staying in Lithuania for a period or periods totalling 183 days or more during the tax period. Staying in Lithuania for a period or periods totalling 280 days or more in consecutive tax periods, provided that the stay during the period or periods totalled 90 days or more in any of such tax periods. Any natural person who is a Lithuanian citizen but does not meet the above criteria, who receives remuneration under a labour contract or a contract substantially corresponding to a labour contract, or whose expenses for residence in another country are covered from the state or municipal budget of Lithuania.
Liechtenstein Possession of a residence permit. Staying in the territory of the country for more than 6 months continuously, excluding short breaks.
Slovakia Being physically present in Slovakia for 183 or more days in a calendar year
Montenegro Spend at least 183 days in the tax year. Presence of permanent residence in Montenegro. Having a centre of personal and economic activity in Montenegro.
Czech Republic Staying more than 183 days in a calendar year. Permanent residence in the Czech Republic (permanent address).
Switzerland An individual is considered a tax resident under Swiss domestic tax law if he or she: has a permanent place of residence and a centre of vital interests; is in Switzerland with the intention of engaging in gainful activity for a consecutive period (excluding short-term absences) of at least 30 days; is in Switzerland without the intention of engaging in gainful activity for a consecutive period (excluding short-term absences) of at least 90 days.
Estonia If the stay in Estonia in any 12-month period exceeds 183 days

It is quite difficult to choose on your own the country with the best tax residency in Europe, as it is necessary to thoroughly study the corporate and tax legislation of the country you are interested in, so lawyers and tax consultants from Regulated United Europe will be glad to help you.

Conclusion

When choosing a country to start a business, lawyers from Regulated United Europe would recommend the following criteria:

  • The field of activity of the company. Different countries are suitable for different spheres of activity, for example, an IT company will preferably be opened in Estonia or Ireland, while a manufacturing company with a large number of of low-skilled labour – in Bulgaria or Romania.
  • Ease of starting and running a business. In addition to tax rates, the possibility of remote management of the company is important, as well as the cost of its maintenance. If your field of activity requires licences or permits from the state, you should carefully consider this issue before opening a company.
  • Taxation. Taxation is important for both the company and its owners – individuals, and it depends on whether you plan to reside in the country where you start your business or whether you are interested only in setting up a legal entity and managing it remotely. In the first case, taxation for individuals is important for you, in the second case – only corporate taxes.
  • Human potential. Depending on the company’s business, the list of suitable countries can vary greatly – if you need a highly skilled labour force with good English language skills to carry out your activities, then the countries with the lowest wages in the EU will not be the right option for you.
  • Salary level. As in the previous point, the area of activity of the company plays the most important role – if the area of your business implies employment of a large number of low-skilled labour, you should first consider the countries with the lowest wages in the EU.

Countries with lowest taxes in Europe

 In the context of the European tax landscape, Estonia stands out with its unique and innovative taxation system, making the country one of the most attractive for entrepreneurs and investors. The Estonian taxation model, based on the principle of non-taxation of undistributed profits, offers significant advantages for business growth and development. In this article, we will focus on Estonia as the leading country in Europe in terms of favourable taxation for companies.

Peculiarities of the Estonian tax system

Estonia offers a unique taxation system for corporate profits, where tax is paid only at the time of profit distribution. This means that invested or reinvested profits within the company are not taxed, which encourages reinvestment and accelerated business development. This approach encourages companies to grow and innovate, and makes Estonia one of the most attractive jurisdictions for doing business in Europe.

Advantages of the Estonian tax model for business

  1. Incentivising reinvestment. The absence of tax on retained earnings allows companies to effectively increase their capital through reinvestment, which is a key factor for sustainable growth.
  2. Transparency and simplicity. The Estonian tax system is characterised by a high degree of transparency and simplicity, reducing administrative barriers and compliance costs.
  3. Support for international business. Estonia offers favourable conditions for international companies, including thanks to its well-developed digital infrastructure and the possibility to manage business online through the e-Residency system.
  4. Tax incentives for startups. The country provides a number of tax incentives and support for start-ups, making it one of the best platforms for innovative entrepreneurship in Europe.

Conclusion: Estonia is a leader in Europe in terms of favourable taxation for business. A unique tax system that encourages reinvestment and innovation, transparency and ease of administration, as well as strong support for international and innovative businesses create ideal conditions for companies to develop and expand their operations in Estonia. These factors make the country an attractive point on the European map for entrepreneurs seeking to maximise the efficiency of their business by optimising their tax liabilities.

 Lowest income taxes in Europe

 As part of the search for optimal tax conditions for working and living, Europe presents a mosaic of diverse tax systems. Among European countries, Estonia stands out for its tax policy, offering some of the most attractive conditions for individuals. This article takes a closer look at why it is Estonia that leads the way in Europe in terms of favourable personal income taxation.

Peculiarities of income tax in Estonia

Estonia applies a progressive personal income tax rate, which is considered to be one of the most loyal in Europe. Personal income tax is 20 per cent, but the tax deduction system allows for a significant reduction in the taxable base, making the real tax rate one of the lowest in Europe.

Advantages of the Estonian tax system

  1. Understandability and transparency. The Estonian tax system is characterised by a high degree of comprehensibility and transparency. The simplicity of declaring and paying taxes reduces the administrative burden on taxpayers.
  2. Tax benefits and deductions. Estonia offers a wide range of tax exemptions and deductions for individuals, which can significantly reduce taxable income and, consequently, the amount of tax payable.
  3. Incentivising investments. A peculiarity of the Estonian tax system is the absence of tax on reinvested profits, which stimulates investment and favours capital growth.
  4. Digitalisation of processes. Estonia is a world leader in the digitalisation of public services, including tax administration. Electronic income declaration simplifies the process and makes it as convenient as possible.

Comparison with other European countries

While many European countries apply significantly higher income tax rates and have more complex taxation and administration systems, Estonia provides more attractive conditions for individuals. This not only reduces the financial burden on taxpayers, but also helps to attract highly qualified specialists and investors to the country.

Conclusion: Estonia demonstrates that even in the modern European economy it is possible to create a tax system that favours business development and attracts foreign specialists. The combination of low tax rates, simplicity and transparency of taxation makes Estonia one of the most attractive countries in Europe for living and working. Thus, Estonia not only holds the leading position in terms of favourable personal income taxation in Europe, but also serves as an example of successful tax policy on the international level.

 Lowest taxes in Europe for business

 In today’s world, the choice of country for doing business is often determined by the tax policy of the state. Europe, with its diverse tax systems, offers entrepreneurs many opportunities to optimise their tax liabilities. In this context, Estonia stands out as a country with one of the most favourable tax systems for business in Europe, offering unique conditions for developing companies and attracting investments.

Peculiarities of the Estonian tax system

Estonia offers a revolutionary model of corporate income taxation, where tax is only paid when profits are distributed in the form of dividends. The corporate tax rate is 20 per cent, but until dividends are paid, the company’s profits can be reinvested tax-free. This creates incentives for business growth and development, allowing companies to efficiently utilise and increase their capital.

Business benefits

  1. Incentivising reinvestment. Deferred taxation of profits until they are distributed motivates companies to reinvest their earnings, contributing to accelerated business development and expansion.
  2. Simplicity and transparency. The Estonian tax system is characterised by a high degree of simplicity and transparency, which reduces the administrative burden on companies and the risk of tax disputes.
  3. Support for innovation. Estonia actively supports innovative projects and startups by offering various tax incentives and support programmes, which makes the country attractive for technology companies.
  4. Digital economy. Thanks to the developed e-government infrastructure, Estonia offers unique opportunities for doing business in a digital environment, simplifying many procedures and making them more accessible.

Comparison with other European countries

Compared to other European countries with more traditional and sometimes more burdensome taxation systems, Estonia offers a number of undeniable advantages for doing business. This makes it one of the most attractive jurisdictions for investors and entrepreneurs seeking efficient tax planning and optimisation of their tax liabilities.

Conclusion: Estonia is a leader in Europe in terms of the attractiveness of its tax system for business. Its innovative approach to taxation, support for reinvestment, ease of administration and emphasis on digitalisation create favourable conditions for the development of companies of various sizes. Thus, Estonia not only offers some of the lowest taxes in Europe for business, but also demonstrates how state tax policy can stimulate economic growth and innovation.

 Lowest taxes for freelancers in Europe

 In a globalised world and the development of the digital economy, freelancing is becoming an increasingly popular form of employment. Europe, with its diverse tax systems, offers freelancers a wide range of opportunities. However, when choosing a country to register an activity, it is important to consider not only the amount of taxes, but also the convenience of doing business. In this context, Estonia represents one of the most attractive jurisdictions for freelancers due to its favourable tax policy and developed e-government infrastructure.

Peculiarities of taxation of freelancers in Estonia

Estonia offers freelancers a unique opportunity to run their business through the e-Residency system. This allows not only to simplify the process of business management, but also to optimise tax liabilities. Personal income tax is 20 per cent, but there are a number of tax exemptions and deductions that can significantly reduce the tax burden.

Benefits for freelancers

  1. Simplicity and accessibility. Registering and managing your business through e-Residency makes the process as simple and accessible as possible for freelancers from all over the world.
  2. Tax optimisation. The Estonian tax system offers opportunities for tax optimisation, including exemptions and deductions that can be applied to freelancers’ income.
  3. Government support. The Estonian government actively supports freelancers and entrepreneurs by offering various support and training programmes.
  4. Digital infrastructure. Thanks to a highly developed digital infrastructure, freelancers can efficiently manage their business, communicate with clients and access government services online.

Comparison with other European countries

Compared to other European countries, Estonia offers some of the most favourable conditions for freelancers. Low tax rate, possibility of tax optimisation, as well as convenience and ease of doing business make Estonia an attractive jurisdiction for international freelancers.

Conclusion: Choosing Estonia as a jurisdiction for registering a freelancer’s activity allows not only optimising tax liabilities, but also gaining access to a convenient and efficient business management system. The advantages of the Estonian tax system, combined with a developed digital infrastructure, make the country one of the most attractive in Europe for freelancers seeking to maximise efficiency and minimise administrative barriers in running their business.

 Which EU country is best to choose for tax residence

 Choosing a country for tax residency is a key decision for international entrepreneurs and investors. The European Union (EU) has many jurisdictions with different tax regimes, each offering unique advantages. However, when choosing a tax residency, it is important to consider not only the tax rate, but also the overall tax policy, the stability of the economy, and the ease of doing business. In this context, Estonia stands out as one of the most attractive jurisdictions for tax residency in the EU.

Main advantages of Estonia

  1. Innovative taxation system. Estonia offers a unique tax system for corporations, where income tax only needs to be paid when dividends are distributed. This allows companies to reinvest profits without additional tax costs.
  2. Simplicity and transparency. The Estonian tax system is characterised by a high degree of transparency and predictability, which reduces risks for business and simplifies the planning of tax liabilities.
  3. Digital economy and e-Residency. Estonia is a leader in the digitalisation of public services. The e-Residency programme makes it possible to run a business online from anywhere in the world, which makes the country particularly attractive to international entrepreneurs.
  4. Access to the European market. As a member of the EU, Estonia offers businesses access to the single European market, which expands trade and investment opportunities.

Comparison with other EU countries

Although some EU countries, such as Ireland or Cyprus, also offer attractive tax regimes for companies, Estonia provides a unique combination of low taxes, digitalisation of processes and stability of the business environment. Unlike other jurisdictions where low taxes may be accompanied by complex administration or uncertain tax laws, Estonia offers a simple and straightforward tax system.

Conclusion: Choosing Estonia as a country for tax residency is an optimal decision for entrepreneurs and investors seeking efficient tax planning in a stable and predictable jurisdiction. The innovative tax system, combined with advanced digital infrastructure and access to the European market, makes Estonia one of the most attractive countries for tax residency in the European Union. 

EU countries with lowest import taxes

Import duties are an important trade policy instrument affecting economic relations between countries. In the European Union (EU), tariffs and duties are harmonised for all members of the customs union, but there are certain countries and territories that offer special conditions for importing goods, thanks to various trade agreements and economic zones. In this article, we will look at which EU countries offer the lowest import duties and what benefits this can offer international entrepreneurs.

EU and import duties: the big picture

The EU applies the Common Tariff Rate (CTR) to goods imported from outside the EU. However, thanks to numerous trade agreements, goods from certain countries can be imported at reduced rates or even duty-free. Within the EU itself, there are special economic zones and territories with special tax regimes that can also offer favourable conditions for imports.

Countries with the most favourable conditions

  1. The Netherlands. Thanks to its strategic location and the port in Rotterdam, one of the largest in the world, the Netherlands offers favourable conditions for import and transit of goods. The country actively utilises its logistical advantages by offering simplified customs procedures and special economic zones.
  2. Belgium. Belgium offers similar logistical advantages with its port in Antwerp. The country is renowned for its efficient customs system and well-established channels for expedited import processing.
  3. Luxembourg. Despite the absence of its own seaports, Luxembourg offers attractive conditions for imports due to its favourable tax legislation and well-developed logistics infrastructure.
  4. Malta. Malta offers special conditions for imports of goods, especially in the services and technology sector, due to its policy of attracting foreign investment and developing the economy.

Importance of trade agreements

EU trade agreements with third countries play a key role in ensuring low import duties for European businesses. Countries participating in these agreements can benefit from substantially reduced rates or a complete waiver of duties on certain categories of goods.

Conclusion: The choice of a country to import goods into the European Union depends on many factors, including logistics, customs procedures and tax policy. The Netherlands, Belgium, Luxembourg and Malta are attractive jurisdictions in terms of import duties and can offer significant advantages for international entrepreneurs. However, when choosing a tax strategy, it is important to take a holistic approach, including analysing all the associated costs and potential benefits of trading in the chosen country.

Tax comparison Europe

Tax policies vary widely across Europe, making the continent attractive to international investors in certain jurisdictions depending on their tax rates and regulatory environment. In this article, we will look at the countries with the highest and lowest tax rates in Europe to help investors and entrepreneurs make informed choices when planning their business operations.

High-tax countries

  1. Denmark. Denmark is often singled out as having one of the highest levels of taxation in the world. The standard income tax rate for individuals can reach up to 55.9%, including all municipal and state levies. This is due to the high level of social guarantees and quality of life.
  2. Sweden. Sweden’s taxes are also high, with a top personal income tax rate of about 52 per cent. As in Denmark, high taxes go to finance extensive social protection and public services.
  3. Belgium. Belgium has one of the highest taxation rates in the EU, with a top personal income tax rate of up to 50%. The tax system in Belgium is complex, with many local and regional taxes increasing the overall tax burden.

Low-tax countries

  1. Bulgaria. Bulgaria Bulgaria offers one of the lowest tax rates in the European Union, with a flat rate of corporate tax and personal income tax of 10%. This makes the country attractive for foreign investors and business immigration.
  2. Ireland. Ireland is known for its corporate tax rate of 12.5%, which is one of the lowest in Europe. This has contributed to Ireland becoming a significant financial hub, attracting many international companies, especially from the high-tech sector.
  3. Cyprus. Cyprus offers a corporate tax rate of 12.5% and a number of tax incentives for foreign investors, making it a popular choice for international business. In addition, Cyprus has an advantageous programme for investors who can take advantage of special tax treatment of dividends and interest.

Conclusion

The choice of a country to do business in Europe depends significantly on the tax policy and economic environment. High-tax jurisdictions tend to offer high levels of social protection and developed infrastructure, while low-tax jurisdictions attract businesses with favourable tax rates and less bureaucracy. It is important to carefully analyse all aspects before deciding where to incorporate a company to ensure the best fit between tax strategy and business objectives.

Also, lawyers from Regulated United Europe provide legal services for obtaining a crypto license in Europe.

FREQUENTLY ASKED QUESTIONS

Countries in Europe with the easiest company start-up process typically include Estonia, the UK and Ireland. Estonia is known for its innovative e-Residency system, which allows foreigners to easily register and operate a business entirely online. The UK and Ireland attract with their ease of company registration, transparent tax regime and relatively low start-up costs. All these countries offer a favourable business environment that supports innovation and entrepreneurship with foreign participation.

In Europe, the countries with the lowest corporate tax burden typically include Ireland, Bulgaria, Cyprus, Estonia, Hungary and Cyprus. These jurisdictions offer relatively low corporate taxes, making them attractive to international businesses.

In Europe, the largest amount of taxes from individuals is usually collected in countries with high levels of social security and progressive tax systems, such as Sweden, Denmark, Finland and Belgium. These countries have high personal income tax rates, especially for high income earners.

The highest income tax rate in Europe is usually found in Scandinavian countries such as Sweden and Denmark, where it can exceed 50%. These countries are known for their high taxes and extensive social programmes for citizens.

The lowest income tax rate in Europe is usually found in Bulgaria, where it is 10% for individuals. This makes the country one of the most attractive in Europe in terms of tax burden on the income of tax resident citizens.

Starting an IT company is often considered the most profitable in Ireland because of its low corporate tax rate, skilled professionals and favourable investment environment. Estonia is also attractive for IT businesses due to its innovative e-Residency system and simplified tax system.

In Europe, countries that have recognised cryptocurrency on a national level include Switzerland, Malta and Estonia. Switzerland is known as one of the centres of cryptocurrency and blockchain innovation, Malta is actively working on the creation of a "Blockchain Island", and Estonia is one of the first countries to offer blockchain solutions at the state level and create a favourable environment for crypto-business.

Cyprus is often considered one of the most favourable countries to start a forex company in Europe due to its attractive tax policies, EU membership and respected regulator, the Cyprus Securities and Exchange Commission (CySEC). CySEC offers a recognised and well-regulated environment that attracts many forex brokers.

Malta is considered one of the most favourable countries to start an online gambling company in Europe due to its prestigious regulator
(MGA), its attractive tax system and the fact that it is part of the EU, giving access to the entire European market.

Lithuania is considered one of the most favourable countries in Europe for opening a bank account for a foreign-owned company. This is due to its developed financial infrastructure, flexible approach to international businesses and simple account opening procedures for foreign investors.

In Europe, in countries such as the UK and Estonia, a company can officially exist without hiring employees, especially if it uses external services to manage day-to-day operations and has only one owner.

In Europe, company ownership data is publicly available in countries such as the UK, where Companies House publishes ownership information, and Estonia, known for its transparent business system. Open access to company ownership data is important for ensuring business transparency, combating money laundering, tax evasion and corruption, and building investor and partner confidence.

In Europe, there are different levels of transparency and confidentiality of company ownership data depending on the legislation of each country. Most countries in the European Union require disclosure of beneficial ownership information as part of measures to combat money laundering and terrorist financing. However, the extent to which this information is available to the public may vary.
Countries with limited access to company ownership data:

  • Luxembourg: Although beneficial ownership information must be provided to the register, access to it may be restricted.
  • Malta: Malta requires disclosure of ownership information, but access to this data may be restricted to the public.
  • Cyprus: In the past Cyprus has been known as a highly confidential jurisdiction, but recent legislative changes are aimed at improving transparency.

RUE customer support team

Milana
Milana

“Hi, if you are looking to start your project, or you still have some concerns, you can definitely reach out to me for comprehensive assistance. Contact me and let’s start your business venture.”

Sheyla

“Hello, I’m Sheyla, ready to help with your business ventures in Europe and beyond. Whether in international markets or exploring opportunities abroad, I offer guidance and support. Feel free to contact me!”

Sheyla
Diana
Diana

“Hello, my name is Diana and I specialise in assisting clients in many questions. Contact me and I will be able to provide you efficient support in your request.”

Polina

“Hello, my name is Polina. I will be happy to provide you with the necessary information to launch your project in the chosen jurisdiction – contact me for more information!”

Polina

CONTACT US

At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 661 75988
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania

Company in Poland Sp. z o.o

Registration number: 38421992700000
Anno: 28.08.2019
Phone: +48 50 633 5087
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

Regulated United Europe OÜ

Registration number: 14153440–
Anno: 16.11.2016
Phone: +372 56 966 260
Email:  [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia

Company in Czech Republic s.r.o.

Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email:  [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague

Please leave your request