The tax burden is one of the key factors influencing a business’s decision to enter new markets. In Europe, corporate income tax rates vary significantly, ranging from a low of 9% to over 30%. Learn more about which countries have the highest corporate tax rates and where it is most advantageous to set up a company

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Tax rates remain one of the key criteria when choosing a country to do business in. Within Europe, the difference in corporate income tax rates can be significant—ranging from less than 10% to over 30%—which directly affects companies’ profitability.

The highest tax burden in the region is found in Western and Southern European countries, while Eastern Europe offers significantly more favorable conditions. At the same time, after decades of gradual rate reductions, this trend has nearly stalled, and recent years have shown stabilization or even occasional increases in taxes.

In the previous article, we provided a ranking of the richest countries in the world in 2026 by GDP.

Doing business is always associated with risks: taxes, contracts, inspections, conflicts with partners or government agencies. A personal business lawyer will help you avoid critical mistakes and protect the interests of the company at every stage of its development.

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Which European countries have the highest taxes for businesses?

Corporate income tax remains the key indicator of the tax burden. It is this tax that determines what portion of profits a business pays to the state.

The highest rates in Europe are currently found in the following countries:

- Malta – 35%

- Germany – 30.06%

- Portugal – 29.5%

- Italy – 27.8%

Malta leads in terms of tax burden—a 35% rate makes it one of the most expensive jurisdictions for companies from a tax perspective. At the same time, major economies such as Germany and Italy also maintain high rates, which is partially offset by developed infrastructure and access to the EU market.

On average, the corporate income tax rate in Europe is about 21.6%, which is lower than the global average (23.6%) and significantly lower than in the U.S. (25.6%).

In our previous article, we discussed how to legally diversify your finances within jurisdictions not included in the CRS in 2026.

Where in Europe are business taxes the lowest

Despite high rates in some countries, Europe also offers jurisdictions with the most favorable tax regimes. These are often the hubs for international business and startups

The lowest corporate income tax rates are in effect in the following countries:

- Hungary – 9%

- Bulgaria – 10%

- Cyprus – 12.5%

- Ireland – 12.5%

Hungary is the clear leader in terms of the lowest tax burden—a rate of just 9% makes it one of the most attractive countries for company registration in Europe. Bulgaria also maintains a consistently low tax rate, which stimulates the development of small and medium-sized businesses.

We previously discussed which countries offer favorable fixed tax conditions for high-net-worth individuals.

How are tax rates changing in Europe?

Tax policy in Europe is not static—countries regularly adjust rates depending on the economic situation and budgetary needs.

The following changes have been recorded over the past year:

- Lithuania raised its rate from 16% to 17%

- Slovakia – from 21% to 24%

At the same time, some countries have taken a different path:

- Iceland lowered its rate from 21% to 20%

- Luxembourg – from 24.9% to 23.87%

These changes indicate that after a prolonged period of tax cuts in Europe, a phase of stabilization has begun. Countries are trying to strike a balance between attracting business and the need to fill the budget.

Investments, opening a company in another country, remote launch of a representative office or team relocation require a clear legal strategy. A personal business lawyer accompanies the entire process: from choosing a jurisdiction and tax model to visa processing and asset protection.

Engage a personal business lawyer and ensure safe relocation and development of your company abroad!

We remind you! Are you planning to invest in real estate under the Golden Visa program? We have already told you which programs in 2025 have become the most profitable for investors. The article compares the UAE, Greece, Turkey, Latvia and Asian countries, the real return on real estate and key risks that should be considered before investing.