Europe tax rates

Among Europe countries, Romania has the lowest top income tax rate at 10.00% in 2023. The regional average top rate is 39.5%.

Switzerland has the lowest corporate tax rate in Europe at 8.50% (2023). The regional average is 19.8%.

Based on the combined income tax and employee social security burden, Switzerland is the most tax-friendly country in Europe with a combined maximum rate of 17.9%.

Hungary has the highest standard VAT rate in Europe at 27.00% (2023). The regional average VAT rate is 21.5%. VAT is charged on most goods and services, though most countries apply reduced rates to essentials like food and medicine.

For corporate taxes, Switzerland offers the lowest rate in Europe at 8.50%. However, the best jurisdiction for a business depends on more than just the headline rate — factors like VAT, employer social security costs, ease of setup, and double tax treaties all affect the true tax burden. The regional average corporate tax is 19.8%.

The average top income tax rate in Europe is 39.5%, compared to a global average of approximately 31%. The average corporate tax rate in Europe is 19.8%, against a global average of around 23%. Europe is a relatively high-tax region.

Switzerland does not levy a separate capital gains tax in Europe. In these countries, profits from selling investments or property may either be tax-free or taxed as ordinary income at standard rates.