Denmark is the European country with the highest top statutory income tax rate as of 2025, with the Nordic country having a top taxation band of **** percent. Other countries with high taxes on top earners included France, with a top rate of **** percent, Austria, with a top rate of ** percent, and Spain, with a top rate of ** percent. Many countries in Europe have relatively high top income tax rates when compared with other regions globally, as these countries have relatively generous social systems funded by tax incomes. This is particularly the case in Western, Northern, and Central Europe, where the social state is generally stronger. On the other hand, formerly communist countries in the Central and Eastern Europe (CEE) region tend to have lower top income tax rates, with Romania and Bulgaria having the lowest rates in Europe in 2024, with their top income tax brackets both being only ** percent. These countries often have less well-developed social systems, as well as the fact that they must compete to retain their workers against other European countries with higher average wages. In spite of low-income taxes, these countries may take other deductions from employee's wages such as pension and healthcare payments, which may not be included in income taxation as in other European countries.

As of 2025, ***** had the highest corporate tax rate in Europe, with a ceiling of ** percent. Germany followed in second place, with a maximum tax rate of ** percent. Hungary and Macedonia hold some of the lowest corporate tax rates in Europe.

This dataset provides values for CORPORATE TAX RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

As of 2023, the average taxation rate for a single person without children who earned an average salary in the European Union was ***** percent of their total earnings. For a two-earner couple without children earning an average salary it was slightly less, at ***** percent, while for a single person without children earning **** times the average salary, the rate of taxation in the EU was *****%. Having children greatly reduced the average rate of taxation, with a one-earner couple with two children in the EU only paying out ***** percent of their gross household earnings in taxes in 2023. Tax rates in Europe are generally quite high, due to the progressive income tax systems set in place during the 20th century in many countries, which require high taxation in order to fund generous social welfare systems. ******* was the country with the highest average rates of taxation in 2023, with a high earning single person without children subject to pay almost half of their gross household earnings out in taxes. Other countries in North-western Europe such as *******, *******, and ********** also top the list for highest income taxation rates in Europe, while ****** was the country in Europe with the lowest average taxation rates in Europe during the same period. In both ******* and ******, single-earner families with two children actually saw the lowest average tax rates, due to the strong pronatalist policies in these countries and tax incentives for traditional single-earner households.

When analyzing the historical PIT rates, it should be noted that in 2000 the average rate was almost 45%. The highest income tax (approx. 60%) was imposed in Belgium, Denmark, as well as in the Netherlands and France. On the other hand, the lowest (25%) rates were recorded in Estonia and Latvia, which were not yet members of the European Union. In the following years, most EU countries rather lowered PIT rates, and the average of this tax in EU countries is 38.6%. The most significant reductions were introduced by Bulgaria, Lithuania, Romania and also Hungary. The PIT tax burden differs significantly in the EU countries, as some countries have relatively low rates, but in Denmark, Portugal and Sweden, the PIT tax exceeds 50%.

Portugal had the highest combined corporate income tax rate in 2023, reaching 31.5 percent, and was followed by Germany with a rate of 29.94 percent. On the other hand, Hungary had the lowest combined corporate income tax rate, reaching just nine percent in 2023.

This dataset provides values for SALES TAX RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

The Corporate Tax Rate in European Union stands at 17.50 percent. This dataset provides - European Union Corporate Tax Rate- actual values, historical data, forecast, chart, statistics, economic calendar and news.

The Personal Income Tax Rate in European Union stands at 29.90 percent. This dataset provides - European Union Personal Income Tax Rate- actual values, historical data, forecast, chart, statistics, economic calendar and news.

This dataset provides values for WITHHOLDING TAX RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

Finland had the highest tax on spirits of all alchol volumes in the European Union as of June 2024. One *** liter bottle of spirits with an alcohol volume of ** percent was taxed at ***** euros in Finland. In contrast, the same bottle of spirits would be taxed at just **** euros in Bulgaria.

This horizontal bar chart displays tax revenue (% of GDP) by region using the aggregation average, weighted by gdp in Europe. The data is about countries.

Information on net earnings (net pay taken home, in absolute figures) and related tax-benefit rates (in %) complements gross earnings data with respect to disposable earnings. The transition from gross to net earnings requires the deduction of income taxes and employee's social security contributions from the gross amounts and the addition of family allowances, if appropriate.

The amount of these components and therefore the ratio of net to gross earnings depend on the individual situation. A number of different family situations are considered, all referring to an average worker. Differences exist with respect to the number of workers/earners (only in the case of couples), number of dependent children, and level of gross earnings, expressed as a percentage of the gross earnings of an average worker (AW).

All the data are based on a widely acknowledged model developed by the OECD, where figures are obtained from national sources (for further details on data providers, see the national contact list in Annex).

The collection contains, for selected situations, data for the following variables and indicators :
a) gross and net earnings, including the transition components "income taxes", "employee's social security contributions" and "family allowances", if appropriate;
b) tax rate, defined as the income tax on gross wage earnings plus the employee's social security contributions less universal cash benefits, expressed as a percentage of gross wage earnings;
c) tax wedge on labour costs, defined as income tax on gross wage earnings plus the employee's and the employer's social security contributions, expressed as a percentage of the total labour costs of the earner. The total labour costs of the earner are defined as his/her gross earnings plus the employer's social security contributions plus payroll taxes (where applicable). The tax wedge on labour costs structural indicator is available only for single persons without children earning 67% of the AW.
d) unemployment trap, measuring the percentage of gross earnings which is taxed away through higher tax and social security contributions and the withdrawal of unemployment, and other, benefits when an unemployed person returns to employment. This structural indicator is available only for single persons without children earning 67% of the AW when in work.
e) low wage trap, measuring the percentage of gross earnings which is taxed away through the combined effects of income taxes, social security contributions and any withdrawal of benefits when gross earnings increase from 33% to 67% of AW. This structural indicator is available for single persons without children and one-earner couples with two children.

The country in the EU with the highest implicit taxation rate on labor income was Italy in 2023, with a rate of ** percent, while Austria had the second highest rate at **** percent. Bulgaria and Malta had the lowest rates of implicit taxes on labor income, at **** percent.

The country in the European Union with the highest implicit taxation rate on consumption was Hungary in 2023, with an implicit tax rate of **%, while Luxembourg was the country with the second highest implicit tax rate at **** percent. Spain was the EU country with the lowest implicit consumption tax rate, at **** percent.

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Governments around the world rely on tax revenues as a primary means to sustainably finance their operations, including providing infrastructure, public services, and paying for their employees. However, the extent to which countries collect taxes varies significantly, as illustrated by data from the United Nations showing government tax revenues as a share of gross domestic product (GDP).

In many European nations, tax revenues represent over a third of GDP, with countries like France and Denmark reaching levels as high as about half. These figures underscore the significant role of taxation in funding public expenditures in these countries.

Conversely, in most other parts of the world, tax revenues constitute a smaller portion of GDP. In some countries, taxes make up only a few percent of GDP, reflecting lower levels of government intervention in the economy or differing tax structures.

It's essential to recognize that variations in tax revenues are not solely attributable to differences in the capacity to collect taxes. While some variations may indeed reflect disparities in administrative capabilities or enforcement mechanisms, others stem from deliberate policy choices and political preferences regarding the level of taxation.

Moreover, reliance on alternative revenue sources, such as revenues from natural resources or foreign aid, can introduce volatility and uncertainty into a government's fiscal position. Therefore, the ability to effectively collect taxes remains crucial for ensuring stability and predictability in financing government activities.

Taxation also serves broader economic and social objectives beyond revenue generation. For instance, progressive taxation can contribute to reducing income inequality by redistributing wealth and funding social welfare programs. Conversely, lower tax rates may stimulate economic growth by incentivizing investment and consumption.

However, the optimal level and structure of taxation are subjects of ongoing debate and vary depending on economic conditions, societal preferences, and political ideologies. Governments must strike a balance between raising sufficient revenue to finance public expenditures and minimizing distortions and inefficiencies caused by taxation.

Furthermore, tax policies should be designed with consideration for their potential impact on economic behavior, investment decisions, and international competitiveness. International cooperation and coordination are also essential, particularly in addressing issues such as tax evasion, avoidance, and base erosion in an increasingly interconnected global economy.

In conclusion, while countries differ significantly in the extent to which they collect taxes, taxation remains a fundamental tool for financing government activities and achieving broader economic and social objectives. Effective tax policies must strike a balance between revenue generation, economic efficiency, equity, and international competitiveness to ensure sustainable fiscal outcomes and support inclusive growth and development.

Analysis of ‘Tax rate on low wage earners - Unemployment trap’ provided by Analyst-2 (analyst-2.ai), based on source dataset retrieved from https://data.europa.eu/data/datasets/29rqta57aajujyiwc8yffq on 30 September 2021.

--- Dataset description provided by original source is as follows ---

The 'unemployment trap' measures what percentage of the gross earnings (after moving into employment) is 'taxed away' by the combined effects of the withdrawal of benefits and higher tax and social security contributions.

--- Original source retains full ownership of the source dataset ---

This horizontal bar chart displays tax revenue (% of GDP) by currency using the aggregation average, weighted by gdp in Europe. The data is about countries.

This horizontal bar chart displays tax revenue (% of GDP) by political leader using the aggregation average, weighted by gdp in Europe. The data is about countries.

Approximately half of all tax revenues were generated by taxes on labor in the European Union in 2023, with an additional **** percent coming from consumption taxes, and around ** coming from taxes on capital. Sweden, Germany, and Austria were the European countries which generated the greatest revenue from labor taxes, with these countries being prime exemplars of traditional European welfare states which apply highly progressive taxes - i.e. the more income a person earns, the higher the tax bracket they are in - to labor income in order to be able to fund transfers and social services. At the other end of the scale are countries such as Croatia and Bulgaria, which generate the most of their revenues from consumption taxes. These countries tend to have lower rates of income taxation on their citizens and less robust systems of social welfare, therefore, the government funds its activities more from taxes on the consumption of goods and services.