European international locations—like virtually all international locations around the globe—require companies to pay company earnings taxes on their income. The quantity of taxes a enterprise finally pays on its income is determined by each the company tax baseThe tax base is the overall quantity of earnings, property, belongings, consumption, transactions, or different financial exercise topic to taxation by a tax authority. A slender tax base is non-neutral and inefficient. A broad tax base reduces tax administration prices and permits extra income to be raised at decrease charges.
and the company taxA tax is a compulsory fee or cost collected by native, state, and nationwide governments from people or companies to cowl the prices of normal authorities companies, items, and actions.
price. At present’s map reveals how statutory company earnings taxA company earnings tax (CIT) is levied by federal and state governments on enterprise income. Many corporations usually are not topic to the CIT as a result of they’re taxed as pass-through companies, with earnings reportable beneath the particular person earnings tax.
charges evaluate throughout European OECD and EU international locations.
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Taking into consideration central and subcentral taxes, Malta has the very best statutory company earnings tax price, at 35 p.c. Portugal, Germany, and Italy comply with, at 31.5 p.c, 29.9 p.c, and 27.8 p.c, respectively. Hungary (9 p.c), Eire (12.5 p.c), and Lithuania (15 p.c) have the bottom company earnings tax charges.
On common, the European international locations analyzed at the moment levy a company earnings tax price of 21.3 p.c. That is barely under the worldwide common which, measured throughout 181 jurisdictions, was 23.45 p.c in 2023.
Like most areas around the globe, European international locations have skilled a decline in company earnings tax charges over the previous 4 a long time, however the common company earnings tax price has leveled off lately. In 2024, Austria diminished its company earnings tax price, finalizing a 2022 scheduled tax reduce. However, of all European international locations, solely Turkey and the United Kingdom elevated their company earnings tax price within the final 12 months, a development anticipated to carry regular as international locations have extra environment friendly tax varieties to show in direction of.
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