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Which EU Country Has The Lowest Corporate Tax ?

 
Due to the complicated nature of taxation, it is crucial that you understand the taxation criteria of each country and how it will impact your offshore plan as a whole. As of 2024, several European countries are known for their competitive corporate tax rates, making them attractive for businesses. Here are some of the countries with the lowest corporate tax rates in Europe:
 
1. Hungary
 
- Corporate Tax Rate: 9%
- Additional Details: Hungary offers a flat corporate tax rate, which is the lowest in Europe. The country also provides various incentives for research and development, investment in specific industries, and regions that are economically disadvantaged. There are also favorable tax policies for small and medium-sized enterprises (SMEs).
 
2. Ireland
 
- Corporate Tax Rate: 12.5%
- Additional Details: Ireland's corporate tax rate is highly competitive, especially for trading income. The country is also known for its favorable tax treatment of intellectual property and a robust network of double taxation treaties. Ireland has been a popular destination for tech giants and pharmaceutical companies due to its business-friendly tax policies and skilled workforce.
 
3. Bulgaria
 
- Corporate Tax Rate: 10%
- Additional Details: Bulgaria offers a flat corporate tax rate and also provides significant tax incentives for investment in high-unemployment regions. The country is part of the European Union, which provides access to a large market and various EU funding programs. Bulgaria's tax environment is complemented by relatively low operational costs and a growing economy.
 
4. Montenegro
 
- Corporate Tax Rate: 9%
- Additional Details: Montenegro's tax system is straightforward, with a low corporate tax rate designed to attract foreign investment. The country also offers incentives for businesses investing in specific sectors like tourism, energy, and agriculture. Additionally, Montenegro is working towards EU membership, which may further enhance its attractiveness as a business destination.
 
5. Bosnia and Herzegovina
 
- Corporate Tax Rate: 10%
- Additional Details: Bosnia and Herzegovina offers a low corporate tax rate and various incentives for foreign investors, including tax holidays and exemptions for specific industries and regions. The country has a developing market economy with opportunities in manufacturing, energy, and tourism.
 
6. North Macedonia
 
- Corporate Tax Rate: 10%
- Additional Details: North Macedonia provides a flat corporate tax rate and a range of tax incentives, especially for foreign investors. The country offers tax holidays, reliefs, and exemptions to stimulate economic growth and attract investment. Key sectors include automotive, agribusiness, and information technology.
 
6. Malta
 
- Corporate Tax Rate: 35% (can be reduced to 5%) Read more about Malta Corporate Tax: Malta Ranks Third in EU for Corporate Tax Revenue
- Additional Details: The standard corporate tax rate in is of 35% on the chargeable income for a fiscal year. Malta is the only EU member state that applies the full imputation system; shareholders of a Malta Company are entitled to claim a refund of the tax paid by the company whenever a dividend is being distributed. Shareholders who receive dividends from companies incorporated in Malta may claim a number of refunds on the tax payable depending on the nature of the income received by the company.
 
As of the latest available information, here is a summary of corporate tax rates in European countries:
 
Western Europe
- Ireland: 12.5% (with a higher rate of 25% for certain non-trading income)
- United Kingdom: 25% (main rate for companies with profits above £250,000)
- France: 25%
- Germany: Approximately 29.83% (includes trade tax, which varies by municipality)
- Netherlands: 25.8% (15% for income up to €200,000)
- Belgium: 25%
- Switzerland: Varies by canton, with an average of around 14.7% to 25%
- Luxembourg: 24.94%
 
Northern Europe
- Denmark: 22%
- Sweden: 20.6%
- Norway: 22%
- Finland: 20%
 
Southern Europe
- Italy: 24% (plus a regional production tax of 3.9%)
- Spain: 25%
- Portugal: 21% (plus municipal surtaxes that can add up to 1.5%)
- Greece: 22%
 
Eastern Europe
- Poland: 19%
- Czech Republic: 19%
- Hungary: 9% (the lowest in the EU)
- Slovakia: 21%
- Romania: 16%
- Bulgaria: 10%
 
Baltic States
- Estonia: 20% (only on distributed profits)
- Latvia: 20% (only on distributed profits)
- Lithuania: 15%
 
Balkan States
- Croatia: 18% (10% for annual income up to HRK 7.5 million)
- Serbia: 15%
- Slovenia: 19%
- Bosnia and Herzegovina: 10%
 
These rates are approximate and can change, so it is always advisable to consult with a tax professional or check the latest government publications for precise figures and details regarding any exemptions or special rates that may apply.
 
Other Considerations
 
When evaluating corporate tax rates and the overall tax environment, businesses should also consider:
- Value-Added Tax (VAT): Rates and regulations vary across countries.
- Double Taxation Treaties: Agreements that prevent businesses from being taxed twice on the same income.
- Withholding Taxes: Taxes on dividends, interest, and royalties.
- Tax Compliance and Administration: Complexity and efficiency of the tax system.
- Economic Stability: Macroeconomic factors and political stability.
- Labor Market: Availability of skilled labor and associated costs.
 
Find out more about International Tax Planing
 
These factors combined with the corporate tax rate provide a more comprehensive view of the business environment in each country. These rates are subject to change, so it's important for businesses to consult with a tax professional or conduct up-to-date research when considering tax implications for operations in these countries. Additionally, while the corporate tax rate is an important factor, other aspects such as tax incentives, deductions, and the overall business environment also play significant roles in the decision-making process for companies.
 
Establishing a successful company in Europe calls for meticulous preparation and a firm grasp of local regulations. A successful launch requires careful planning and preparation, including making sure you have all the required paperwork, knowing how much it will cost, and how long it will take. Working with our experts can help streamline this process, providing valuable insights and tailored strategies to ensure successful outcome. Don’t hesitate any longer. Apply to become a client today to work with our experts on legal strategies to overcome barriers.
 

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