When choosing where to establish a business or even settle down, tax rates play a significant role in the decision-making process. Europe is home to a variety of tax systems, with some countries offering incredibly attractive rates for businesses and individuals alike. Whether you’re an entrepreneur seeking to maximize your profits or a remote worker looking to reduce your tax burden, these 10 European countries with the lowest taxes are worth considering.

1. Ireland

Ireland has long been a popular destination for multinational corporations, and it’s easy to see why. With a corporate tax rate of just 12.5%, Ireland offers one of the lowest tax rates in Europe, making it an ideal choice for startups and large businesses alike. Dublin has become a hub for the tech industry, with giants like Google, Facebook, and LinkedIn establishing their European headquarters there. In addition to its business-friendly environment, Ireland offers a high quality of life, making it a great place to both live and work.

2. Bulgaria

Bulgaria offers one of the most attractive tax regimes in Europe, with a flat personal income tax rate of 10% and a corporate tax rate of 10%. This makes it one of the lowest in the EU, drawing in entrepreneurs and foreign businesses. The cost of living is also relatively low compared to other EU nations, making Bulgaria an excellent choice for those looking to maximize their income while enjoying a comfortable lifestyle.

3. Hungary

Hungary boasts one of the lowest corporate tax rates in the EU, at just 9%, making it a hotspot for companies looking to minimize their tax burden. Personal income tax is also relatively low at 15%. Budapest, the capital, offers a thriving startup scene and a lower cost of living than many other European cities, making Hungary a desirable location for entrepreneurs and remote workers.

4. Estonia

Estonia has been a rising star in the European tax landscape, thanks in part to its innovative tax policies and e-Residency program. Estonia has a unique corporate tax system where profits are only taxed when distributed, allowing businesses to reinvest earnings without paying taxes until dividends are paid. The corporate tax rate is 20%, but this deferred tax policy makes it very appealing for growing businesses. Estonia also offers a flat personal income tax of 20%.

5. Cyprus

Cyprus is another attractive destination for entrepreneurs and businesses looking to benefit from low taxes. The island nation offers a corporate tax rate of 12.5%, making it one of the most competitive in Europe. Personal income tax rates are also favorable, with progressive rates starting at 20% and capped at 35%. Cyprus has become a favorite for tech startups and those in the financial services sector due to its business-friendly environment and strategic location at the crossroads of Europe, Asia, and Africa.

6. Switzerland

Switzerland is famous for its low corporate tax rates, which vary by canton but can be as low as 11.9% in certain areas. Switzerland also offers attractive personal income tax rates, which vary depending on the region. Beyond taxes, Switzerland offers a high standard of living, world-class infrastructure, and access to global markets, making it a prime destination for both businesses and expats.

7. Gibraltar

Gibraltar may be small, but it offers big tax benefits. The territory has a corporate tax rate of 10% and no capital gains tax, making it incredibly appealing to businesses and individuals alike. Personal income tax rates are also relatively low, with a progressive tax system that caps at 35%. With its strategic location at the entrance to the Mediterranean, Gibraltar is particularly attractive for businesses in shipping, financial services, and online gaming.

8. Malta

Malta is another low-tax haven in Europe, with a corporate tax rate of 35%, but businesses can benefit from a tax refund system that effectively reduces the rate to as low as 5% for certain companies. Malta also offers favorable personal income tax rates, starting at 15% and capped at 35%. The island nation has become a hub for industries such as iGaming, financial services, and blockchain technology.

9. Monaco

While not technically part of the European Union, Monaco is still a popular destination for individuals seeking low taxes. Monaco has no income tax for residents, making it one of the most attractive places in Europe for high-net-worth individuals. However, it’s worth noting that Monaco is extremely exclusive, and the cost of living is high. Still, for those who can afford it, the tax benefits are hard to beat.

10. Andorra

Nestled between France and Spain, Andorra offers a corporate tax rate of just 10% and no capital gains tax. Personal income tax rates are also very low, starting at 5% and capped at 10%. The country’s combination of low taxes, stunning natural scenery, and high quality of life make it an appealing destination for entrepreneurs and expats alike. While not part of the EU, Andorra has agreements in place that allow businesses to trade freely across Europe.

Conclusion

Choosing the right country to set up your business or establish residency can have a significant impact on your financial future. Ireland, Bulgaria, Switzerland, and the other countries on this list offer some of the lowest tax rates in Europe, along with favorable business environments and high standards of living. Whether you’re an entrepreneur, a freelancer, or simply looking to reduce your tax burden, these countries provide excellent opportunities to thrive both personally and professionally.​⬤