European Corporation Tax Rates

The following rates do not include the 17% of social security contributions. Income tax in Portugal depends on a number of factors, including regional ones (different tax rates depending on whether you live on the mainland, the Azores or Madeira, marital status and the number of parents. Notes: * Bahrain does not have a general corporate tax, but a targeted tax on oil companies, which can reach 46%. See Deloitte, “International Tax – Bahrain Highlights 2021,” last updated January 2021, www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-bahrainhighlights-2021.pdf. The United Arab Emirates is a federation of seven different emirates. Since 1960, each emirate has had the discretion to levy up to 55% corporate tax rate on each company. In practice, this tax is mainly levied by foreign banks and oil companies. For more information on the UAE tax system, see PwC, “Worldwide Tax Summaries – Corporate income tax (CIT) rates.” www.taxsummaries.pwc.com/quick-charts/corporate-income-tax-cit-rates. [9] As no average is given in this section, it covers the 225 countries and territories for which corporate tax rates have been established for 2021 (including those for which GDP data were not available). Sources: Statutory corporate tax rates are taken from the OECD, “Table II.1. Statutory Corporate Tax Rate”, updated in April 2021, stats.oecd.org/index.aspx?DataSetCode=Table_II1; KPMG, “Table of Corporate Tax Rates,” home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html; Bloomberg Tax, “Country Guides – Corporate Tax Rates,” accessed October and November 2021, www.bloomberglaw.com/product/tax/toc_view_menu/3380; and searched individually, see Tax Foundation, worldwide-corporate-tax-rates, GitHub, github.com/TaxFoundation/worldwide-corporate-tax-rates. [10] This average is lower than the average for the 180 countries and territories, as many of the jurisdictions for which GDP data are not available are small economies with low corporate tax rates.

In 2021, 20 countries changed their statutory corporate tax rates. Three countries – Bangladesh, Argentina and Gibraltar – have raised their highest tax rates, while 17 countries – including Chile, Tunisia and France – have lowered their corporate tax rates. This is a list of potential maximum tax rates in Europe for certain income classes. It focuses on three types of taxes: corporation tax, retail trade tax and value added tax (VAT). It is not intended to represent the real tax burden on the company or individual in the listed country. In general, larger and more industrialized countries tend to have higher corporate tax rates than smaller countries. The G7, which is made up of the seven richest countries in the world, has an average legal corporate tax rate of 26.69% and a weighted average rate of 26.41%. OECD member states have an average statutory corporate tax rate of 23.04% and a rate of 25.81% when weighted by GDP. The BRICS[12] have an average statutory rate of 27.40% and a weighted average legal corporate tax rate of 26.07%. Today, most countries have corporate tax rates below 30%. Taking into account central and sub-central taxes, Portugal has the highest statutory corporate tax rate among European OECD countries, at 31.5%.

Germany and France follow with 29.9% and 28.4% respectively. Hungary (9%), Ireland (12.5%) and Lithuania (15%) have the lowest corporate tax rates. Seventeen countries on five continents – Sweden, Colombia, Switzerland, Monaco, Congo, Turkey, Indonesia, France, Gambia, Lao People`s Democratic Republic, Sri Lanka, Angola, Democratic Republic of Congo, Bhutan, Kiribati, Tunisia and Chile – have lowered their corporate tax rates in 2021. Tax rate reductions ranged from just under 1 percentage point in Sweden to a temporary reduction of 15 percentage points in Chile. [4] worldwide-corporate-tax-rates, GitHub, github.com/TaxFoundation/worldwide-corporate-tax-rates. GDP calculations come from the U.S. Department of Agriculture, “International Macroeconomics Data Set,” January 7, 2021, www.ers.usda.gov/data-products/international-macroeconomic-data-set/. The UAE has a corporate tax rate of up to 55%; However, the tax framework is somewhat unique. The high tax rate is mainly paid only by oil and gas companies and subsidiaries of foreign banks. Indeed, the country divides tax brackets by income for individuals and businesses at the federal level. This leads to a tax structure that includes the following: In 1980, corporate tax rates worldwide averaged 40.11% and 46.52% when weighted by GDP. [1] Since then, countries have recognized the impact of high corporate tax rates on corporate investment decisions, so the average in 2021 for 180 separate tax jurisdictions is 23.54% and 25.44% per GDP.

[2] To calculate average GDP-weighted statutory corporate tax rates, the dataset contains GDP data for 180 countries and territories. When calculating average statutory corporate tax rates, whether GDP-weighted or unweighted, only these 180 countries and territories are included (to ensure comparability of unweighted and weighted averages). The 20 countries with the highest statutory corporate tax rates cover almost all regions, albeit unevenly. While eight of the top 20 countries are in Africa, Europe, Oceania and Asia appear only once. Of the other jurisdictions, five are in North America and four in South America. Sources: OECD, “Table II.1. Statutory corporate tax rate; KPMG, “Table of Corporate Tax Rates”; Bloomberg Tax, “Country Guides – Corporate Tax Rate”; and searched individually, see Tax Foundation, “worldwide-corporate-tax-rates/”. Very few tax jurisdictions levy corporate tax at legal rates of more than 35%. The chart below shows a distribution of corporate tax rates across 225 jurisdictions in 2021. Several countries (115 in total) set rates equal to or greater than 20% and less than 30%.

Twenty-two jurisdictions have a legal corporate tax rate equal to or greater than 30% and less than 35%. Only three jurisdictions have a rate of more than 35%. Eighty-five jurisdictions have a legal corporate tax rate of less than 20% and 200 jurisdictions have a corporate tax rate of less than 30%. European countries – like almost every country in the world – require companies to pay corporate taxes on their profits. The amount of tax a company ultimately pays on its profits depends on both the corporate tax base and the corporate tax rate. Today`s map shows how statutory corporate tax rates compare across European OECD countries. [3] Kari Jahnsen and Kyle Pomerleau, “Corporate Income Tax Rates around the World, 2017,” Tax Foundation, September 7, 2017, www.taxfoundation.org/corporate-income-tax-rates-around-the-world-2017/. The tax rates for the period from 1980 to 2020 come from a set of data compiled by the Tax Foundation in recent years. These historical phrases come from several sources: PwC, “Worldwide Tax Summaries – Corporate Taxes”, 2010-2019; KPMG, “Survey of Corporate Tax Rates,” 1998-2003; KPMG, “Table of Corporate Tax Rates,” 2003-2019; EY, Worldwide Corporate Tax Guide, 2004-2019; OECD, “Historical Table II.1 – Statutory Corporate Tax Rate”, 1999, www.oecd.org/tax/tax-policy/tax-database.htm#C_CorporateCaptial; University of Michigan – Ross School of Business, World Tax Database, www.bus.umich.edu/otpr/otpr/default.asp; and many government websites. [1] Unless otherwise noted, calculated averages of statutory corporate tax rates include only jurisdictions for which GDP data are available for all years between 1980 and 2021. For 2021, the dataset includes statutory corporate tax rates for 225 jurisdictions, but GDP data is only available for 180 of these jurisdictions, reducing the number of jurisdictions included in the calculated averages to 180.

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