Tax rates in Europe

This is a list of the maximum potential tax rates around Europe for certain income brackets. It is focused on three types of taxes: corporate, individual, and value added taxes (VAT). It is not intended to represent the true tax burden to either the corporation or the individual in the listed country.

Summary list

The quoted income tax rate is, except where noted, the top rate of tax: most jurisdictions have lower rate of taxes for low levels of income. Some countries also have lower rates of corporation tax for smaller companies. In 1980, the top rates of most European countries were above 60%. Today most European countries have rates below 50%.[1]

Country Corporate tax Maximum income tax rate Standard VAT rate
Albania[2] 15% 23%[3] 20%
Austria 25% 55%[4] 20%[5] (Reduced rates 10% + 13%)[6]
Belarus 18% 15% 20%[2]
Belgium[7] 33.99% 50% (excluding 13.07% social security paid by the employee and also excluding 32% social security paid by the employer) 21% (Reduced rates of 6% and 12%)[5]
Bosnia and Herzegovina[8] 10% 15% (0–15% per location) 17%
Bulgaria[9] 10% 10% 20%[5] (Reduced rates 9%)[6]
Croatia 18% (Reduced rate 12% for small business) 40% (excluding 35.2% total sum of insurances levied on income) 25% (Reduced rates 13% + 5%)(Reduced rates 9%)[6]
Cyprus 12.5% 35% 19% (Reduced rates 5% + 9%)(Reduced rates 9%)[6]
Czech Republic 19% 53.5% (15% income tax + 6.5% by employee + 25% by employer (2.3% healthcare + 21.5% social security + 1.2% state policy of employment) + 7% solidarity contribution (assuming income is above 1 277 328 CZK per year)) 21% (reduced rates of 15% and 10%)[5]
Denmark 22% 55.56% (including 8% social security paid by the employee but excluding 0.42–1.48% church tax imposed on members of the national Church of Denmark) 25% (reduced rate 0% on transportation of passengers and newspapers normally published at a rate of more than one issue per month)[5]
Estonia 0% on undistributed profits (20% CIT on distributed profit[10]) 20% (+ 2.4% of unemployment insurance tax, 0.8% paid by employer, 1.6% paid by employee and 33% social security which is paid before gross wage by employer) around 57,8% in total 20% (reduced rate 9%)[5]
Finland 20% 56.05% to 62.05% depending on municipality, including 7.8%[11] social insurance fees and excluding employer contribution, which is on average 20.88%.[11] 24%[5][12] (reduced rate of 14% for groceries and restaurants, 10% for books, medicine, transport of passengers and some others)
France 33.3% (36.6% above 3.5M€, 15% below 38k€)[13] 49% (45% +4% for annual incomes above €250,000 for single taxpayers or above €500,000 for married couples) [14] 20% (reduced rate of 10%, 5.5%, 2.1% and 0% for specific cases like some food, transportation, cultural goods, etc.)[5][15]
Germany 22.825% (few small villages) to 32.925% (in Munich) depending on the municipality. This includes the 15% CIT, 5.5% solidarity surcharge plus the trade tax payable to the municipality. 47.475% which includes 45% income tax and 5.5% solidarity surcharge based on the total tax bill (13.5% ca. entry level tax for income exceeding €8,004 per year, and gradually rising in microscopic steps up to 45%; all income below the threshold of €8,004 per year is not taxed - 0% tax rate). 19% (reduced rate of 7% applies e.g. on sales of certain foods, books and magazines, flowers and transports)[5]
Georgia 15% 20% 18%
Greece 29% 65.67% (45% for >€40,000+ 7.5% Solidarity Tax for >€40000)+(26.95% Social Security for employees or up to 47.95% for private professionals) 24%[5] (Reduced rates 13% and 5%)[6]
Hungary 9% 15% (additional contributions at 10% Social Security by employee and 22% Social Security by employer and health care 7% by employer) 27%[5][16][17] (Reduced rates 18% and 5%)[6]
Iceland 20%[18] 36.94% from 0 - 834.707 and 46.24% over 834.707 kr (2017)[19] 24% (12% reduced rate)[18]
Ireland 12.5% for trading income 

25% for non-trading income

 40% over €33,800 for single, €42,800 for married taxpayers. 23% [20]
Italy 27.9% (24% plus 3.9% municipal) 45.83% (43% income tax + 2.03% regional income tax + 0.8% municipal income tax) 22%[5] (Reduced rates 10%, 5%, 4%)[6]
Latvia 15% 23%[21] 21% (reduced rates 12% and 0%)[22]
Liechtenstein 12.5% (2.5% on IP and royalties) 28% (max. 8% national and 20% municipal income tax) plus 4% of the taxpayer's net worth is subject to the same rate as wealth tax. 0% on capital gains. 8%[23]
Lithuania 15% (5% for small businesses with up to 10 employees and up to €300,000 income) 41.1% (effective tax rates: 25.5% social insurance (nominally it is 31.2% payable by employer + 3% payable by employee), 15.6% income (nominal rates are 6% for health insurance nominal plus 15% direct income)), applies to annual income of over €15,000[24] annual tax allowance for children is €2,400 (per child) 21% ()Reduced rates 5%, 9%)[6]
Luxembourg 29.22% (commercial activity); 5.718% on intellectual property income, royalties. 43.6% (40% income tax + 9% solidarity surcharge calculated on the income tax)[25] 17%[5] (Reduced rates 3%, 8%, 14%)[6]
Republic of Macedonia[26] 10% 37% [27] (includes income tax 10%, mandatory state pension 18%, mandatory public health insurance 7.3%, mandatory unemployment insurance 1.2%, mandatory personal injury insurance 0.5%) 18%
Malta 35% (6/7 or 5/7 tax refunds gives an effective rate of 5% or 10% for most companies[28]) 35% 18%[5] (Reduced rates 5%, 7%)[6]
Montenegro 9%[29] 12.65% (11% income tax + 15% of the income tax bill to the municipality)[29] 17%[29]
Netherlands 25% above €200,000 of profit and otherwise 20%[30] 52%[31] 21%[32] (reduced rate of 6% and 0% for some goods and services)
Norway[33][34] 24% (proposed 22% by 2018 [35]) 46.9% (53.5% including 14.1% social security contribution by employer. All taxes include 8.2% pension fund payments). 25% (reduced rate of 15% for groceries, and 10% for transport and culture.)
Poland 19% 32% 23% (reduced rates of 5% and 8%)[5]
Portugal 21% 46.5% (additional contributions at 11% Social Security by employee and 23.75% Social Security by employer) 23% (reduced rates 13% and 6%)
Romania 16% 16% (additional 16.5% by the employee for social security contributions, i.e. health insurance, pension and unemployment fund); and additional 23% by the employer for various social security contributions)[36] 19% (5% for food; 9% for medicines, books, newspapers, hotel, or 4%)[5][37]
Russia 20% 13% straight tax + 29% social tax (paid by company) + social insurance from 0,5% to 2,5% depending on traumatism risk. In total ca. 43%. Obvious income tax is fairly low, granting impression of very easy and socially oriented burden, which is not true really. 18%
Serbia 15% 52% (capital gains tax 15%, standard income tax rate 10%, additional contributions by employee: 13% state pension fund, 6.5% state health fund, 0.5% unemployment fund; additional contributions by employer: 11% state pension fund, 6.5% state health fund, 0.5% unemployment; maximum contributions capped (amount changing monthly); additional tax for higher salaries (after 3 times average salary additional 10%, after 6 times average salary additional 15%)),[38][39][40] 20%
Slovakia 22% [41] 19% (additional contributions at 4% health care by employee and 10% health care by employer, 9.4% Social Security by employee and 19.4% Social Security by employer) 20%[5] (10% reduced rate)
Slovenia[42] 19% 50% 22%[5] (reduced rate 9.5%) – from 1 July 2013
Spain 25% 45% 21%[5] (reduced rates 10% and 4%)
Sweden 22% 67% including social security paid by employer[43] 25%[5] (reduced rates 12% and 6%)
Switzerland 16.55% 22.5% (Kanton Zug, Gemeinde Walchwil) to 46% (Kanton Geneve), average rate 34%[44] 8% / 2.5%[45]
Ukraine 18% 17% 20%
United Kingdom 19% (17% from 2020)[46] 47% (45% income tax + 2% NI) - theoretically, NI could reach 12%, but in practice it's never combined with the higher income tax rate

62% for earnings between £100,000 - £123,000 (40% higher rate tax + removal of tax free personal allowance + 2% NI)

45% (additional rate) income tax on annual income above £150,000, 40% (higher rate) between £43,001 and £150,000, 20% (basic rate) between £0 and £43,000. There is also a National Insurance levy between 2% and 13.8% for employees and self-employed individuals but capital gains and dividend income is not subject to NI. The first £11,000 is tax-free if your annual income is below £100,000.

Capital gains is taxed at 10% (or 18% on residential property) for basic rate taxpayers and 20% (or 28% on residential property) for higher and additional rate taxpayers. Dividend income from UK companies is taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.

 20% (reduced rate of 5% for home energy and renovations, 0% for life necessities – groceries, water, prescription medications, medical equipment and supplies, public transport, children's clothing, books and periodicals)[5]

Per country information

Austria

Austrian income taxation is determined by §33 of Austrian Income Tax Code (Einkommensteuergesetz - EStG)

Annual Income [€] Taxation Rate [%]
0 - 11,000 0
11,001-18,000 25
18,001-31,000 35
31,001-60,000 42
60,001 - 90,000 48
>90,000 50

It should be noted that until the end of the year 2020 an additional tax (55%) will affect income of over 1 million €.

Portugal

Income tax in Portugal depends on the number of people in the household. The taxable income is calculated based on the number of household and marital status.

Taxable income Tax on this income
Up to €7,000 14.5%
€7,001 and €20,000 28.5%
€20,001 and €40,000 37%
€40,001 and €80,000 45%
Over €80,000 48%

Germany

German income tax comprises 5 income tax bands, with the first two being based on a totally Progressive tax rate and the rest being flat rate. Taxable income is derived after subtracting personal and child allowances from earned income. In addition a number of other deductions may be claimed by German taxpayers.

Annual income above Annual income below Marginal tax rate 2014[47]
€0 €8,354 0%
€8,355 €13,469 14% − 23.97%
€13,470 €52,881 23.97% − 42%
€52,882 €250,730 42%
€250,731 - 45%

Netherlands

Income tax in the Netherlands (Loonheffing) and social security contributions are combined in one payroll tax. There are no personal tax-free allowances

Annual income Above Annual income below Tax rate (including employee social security)[48] Tax rate (excluding employee social security)
€0 €19,882 33% 1.85%
€19,822 €33,589 41% 10.45%
€33,589 €57,585 42% 42%
€57,585 - 52% 52%

France

Income tax in France depends on the number of people in the household. The taxable income is divided by the number of persons belonging to the household. Each adult counts as one person while the first two children count as half each. From the third child onwards each child counts as one person. Therefore, a household comprising 2 adults and 3 children is considered to be a household of 4 persons for tax purposes

Annual income Above Annual income below Tax rate[49]
€0 €5,963 0%
€5,963 €11,896 5.5.%
€11,896 €26,420 14%
€26,420 €70,830 30%
€70,830 - 41%

Spain

Spanish income tax includes a personal tax free allowance and an allowance per child. In 2012 a special temporary surcharge was introduced as part of austerity measures to balance the budget. The personal allowance currently stands at €5,151.

Annual income above Annual income below Tax rate (excluding temporary surcharge) Tax rate (including temporary surcharge)[50]
€0 €5,150 0% 0%
€5,150 €17,707.20 24% 24.75%
€17,707.20 €33,007.20 28% 30%
€33,007.20 €53,407.20 37% 40%
€53,407.20 €120,000.20 43% 47%
€120,000.20 €175,000.20 44% 49%
€175,000.20 €300,000.20 45% 51%
€300,000.20 - 45% 52%

Italy

Annual income Above Annual income below Tax rate[51]
€0 €15,000 23%
€15,000 €28,000 27%
€28,000 €55,000 38%
€55,000 €75,000 41%
€75,000 - 43%

United Kingdom

Income tax for the United Kingdom is based on 2016/17 tax bands. The current tax free threshold on earnings is £11,500.[52] The relief is tapered by £1 for every £2 earned over £100,000.

Annual income above Annual income below Tax rate[53]
£0 £11,500 0%
£11,500 £45,000 20%
£45,000 £150,000 40%
£150,000 - 45%

Denmark

See also

References

  1. ↑ "Top Marginal Personal Income Tax Rates" (PDF). Tax Policy Center. 2008. Retrieved 2011-12-26.
  2. 1 2 Federation of International Trade Associations : country profiles
  3. ↑ "Tatimi mbi të Ardhurat Personale nga paga". Website of the Albanian Ministry of Finances. Retrieved 2017-02-22.
  4. ↑ New maximum tax rate from 2016-2020,"Einkommenssteuergesetz 1988 § 33","https://www.ris.bka.gv.at/Dokument.wxe?Abfrage=Bundesnormen&Dokumentnummer=NOR40174043, consulted 11 July 2016.
  5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 All current EU standard rates updated Nov 2014, EU VAT rates as at November 2014, http://www.vatlive.com/vat-rates/european-vat-rates/eu-vat-rates/, consulted 5 January 2015.
  6. 1 2 3 4 5 6 7 8 9 10 "EU VAT Rates", All EU vat rates current and historical.
  7. ↑
  8. ↑ Fabel Werner Schnittke – International Consulting and Auditing Company
  9. ↑ Bulgaria cuts corporate tax to 10 percent – Tax – Business – International Herald Tribune
  10. ↑ Andmevara, AS. "Income Tax Act – Riigi Teataja". www.riigiteataja.ee. Retrieved 2016-11-26.
  11. 1 2 http://www.stm.fi/en/insurance/social_insurance_contribution (in English)
  12. ↑
  13. ↑ "French corporate taxes (in French)". French government. 2014. Retrieved 2014-03-20.
  14. ↑ "Individual income tax rates table". KPMG. 2013. Retrieved 2013-07-10.
  15. ↑ "French VAT since 2014 (in French)". French government. 2014. Retrieved 2014-03-20.
  16. ↑ "VAT hike pushes Hungary's consumer price inflation to 5.1% in July". Realdeal.hu. 2009-08-11. Retrieved 2011-05-12.
  17. ↑ "Hungary plans bigger budget cuts, VAT hike to 27 pct". 2012-01-01. Retrieved 2012-01-03.
  18. 1 2 http://www.invest.is/doing-business/taxation/principal-taxes/
  19. ↑
  20. ↑ "VAT increase to 23% confirmed". Irish Times. 2011-12-06. Retrieved 2011-12-07.
  21. ↑ Division, PAYE Planning and Support Services, Planning. "IT1 - Tax Credits, Reliefs and Rates for the Tax Years 2016 and 2017". www.revenue.ie. Retrieved 2017-05-25.
  22. ↑ "41.pants. Piemērojamās nodokļa likmes" (in Latvian). likumi.lv. 14 December 2012. Retrieved 28 December 2013.
  23. ↑ Liechtenstein tax law
  24. ↑ http://www.tax.lt/
  25. ↑ http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DU-13-001/EN/KS-DU-13-001-EN.PDF
  26. ↑ Invest in Macedonia | Taxes and Rates
  27. ↑ "Macedonia's income taxes (in Macedonia)". Public Revenue Office, Macedonia. 2013. Retrieved 2014-09-15.
  28. ↑ http://www.rsmmalta.com.mt/taxation-of-companies.aspx
  29. 1 2 3
  30. ↑ Dutch Tax Administration
  31. ↑ Dutch Tax Administration
  32. ↑ "Netherlands 21% VAT rate increase is effective October 2012".
  33. ↑ The Norwegian tax reform 2004-2006 – regjeringen.no
  34. ↑ Skatteetaten – Guide to Value Added Tax in Norway
  35. ↑ "Fiscal Budget for 2016 and Tax Reform 2018 - Corporate Blog". Corporate Blog. Retrieved 2016-02-13.
  36. ↑ "Buget 2016 | Open Budget". openbudget.ro. Retrieved 2017-01-09.
  37. ↑ "Romania plans big VAT rise to secure bail-out funds". BBC News. 2010-06-26. Retrieved 2011-05-12.
  38. ↑ Personal Income Tax Law Serbia (official website)
  39. ↑ Accurate Personal Income Tax Calculator as of September 2013 for Serbia
  40. ↑ Maximum Contributions for State Funds by Accountant Association of Serbia
  41. ↑ KPMG tax tables
  42. ↑ Ministry of Finance – Tax Administration of the Republic of Slovenia
  43. ↑ http://www.ekonomifakta.se/sv/Fakta/Skatter/Skatt-pa-arbete/Marginalskatt/
  44. ↑ "Der Mythos vom Steuerparadies Schweiz". Neuer Zürcher Zeitung. Retrieved 2017-02-03.
  45. ↑ "Swiss voters approve VAT rate increase". Meridianglobalservices.com. Retrieved 2011-05-12.
  46. ↑ HM Revenue & Customs: Corporation Tax rates
  47. ↑ {de} http://www.gesetze-im-internet.de/estg/__32a.html
  48. ↑ {nl} http://www.xperthr.nl/artikel/995/tabel-1-schijventarief-loonbelasting-en-premies-volksverzekeringen-%282011%29.aspx
  49. ↑ http://www.impots.gouv.fr/portal/deploiement/p1/fichedescriptive_1006/fichedescriptive_1006.pdf
  50. ↑ {es} http://www.abc.es/20111231/economia/abci-tabla-recortes-201112310831.html
  51. ↑ Redazione internet Agenzia Entrate. "Agenzia delle Entrate - Income tax for individuals". .agenziaentrate.gov.it. Retrieved 2014-04-15.
  52. ↑ "Tax and tax credit rates and thresholds for 2016-17 - GOV.UK". www.gov.uk. Retrieved 2016-06-15.
  53. ↑ "HM Revenue & Customs: Income Tax allowances". Hmrc.gov.uk. Retrieved 2014-04-15.

Sources

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