Taxes in Europe


We are often reminded that there are only two certainties in life: ‘death’ and ‘taxes’. While death remains the same in every country however, taxes range widely from country to country, and this is no different in Europe. Taxes in Europe are of course a fact of life just as they are anywhere else, but taxes in England for instance are very different from those in Macedonia.

As a quick demonstration of just how much the taxes vary in Europe, here we will look at the maximum income tax that can be charged across European countries. This maximum income rate means that when an individual earns above a certain amount, this is most that the government will charge (normally the percentage you are taxes increases as you move into higher salary bands). This is quite enlightening and demonstrates the great range of taxes in Europe:


55%: Sweden

54.3%: Norway

53%: Finland

52%: Netherlands

51.5%: Denmark

50%: Austria, Belgium, UK

46.28%: Iceland

45.5%: Switzerland

45%: Croatia, Germany, Italy, Spain

42%: Portugal

41%: France, Ireland, Slovenia

40%: Greece, Turkey

38.95%: Luxembourg

35%: Malta

32%: Poland

30%: Belarus, Cyprus

23%: Latvia

21%: Estonia, Lithuania

20%: Bosnia & Herzegovina

19%: Slovakia

16%: Hungary, Romania

15%: Czech Republic, Ukraine

14%: Serbia

13%: Russia

12%: Georgia

10%: Bulgaria, Macedonia

9%: Montenegro


This is the income tax of those countries at their maximum rate, meaning that you are charged for simply earning a certain amount of money. Of course though it is all subject to change, and in some cases those countries that have lower in come tax may make up the difference elsewhere – with higher VAT or more taxes for local services. Normally this income tax will be deducted from the pay check of the individual so that in a sense they do not ‘miss’ it. On the other hand, those who are self
employed will normally have to have to efile a ‘tax return’ which will mean they must calculate their net profit – allowing for expenses and investments –at the end of each year themselves. This can be complicated, which is why it’s important to have the right tax software.

The higher taxes in Europe when compared to say the US are a result of most of Europe having more public services. For instance in the US residents pay health insurance premiums in order to use privatised hospitals, whereas most countries in Europe have state-owned medical facilities meaning that these are maintained by tax and in some cases a ‘National Insurance’. The variation across European taxes then also comes from the different political parties in power at any given time. At the same time these taxes go towards a range of other services – for instance benefits for those families that can’t afford to support themselves, funding for arts projects and business start ups, and military expenses. This reflects a more socialist nature in much of Europe when compared to the more capitalist USA and each has different advantages and weaknesses. Those countries that have more left wing parties in power will push towards higher taxes