Lowest Tax in the EU: Country Comparison 2026
Corporate tax, personal income tax, and dividend tax compared across all major EU member states. Find out which country offers the lowest effective rates for entrepreneurs and investors.
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EU Countries by Tax Rate 2026: Full Comparison
Corporate income tax, top personal income tax, and dividend tax for a resident individual. Sorted by effective burden for an entrepreneur with dividend income.
| Country | Corp Tax | Top Income Tax | Dividend Tax (individual) |
|---|---|---|---|
| Cyprus (Non-Dom) | 15% | 35% (above EUR 60k) | 0% (Non-Dom, 17 yr) + 2.65% GHS |
| Hungary | 9% | 15% flat | 15% + 13% social |
| Bulgaria | 10% | 10% flat | 5% withholding |
| Ireland | 12.5% | 40% (above EUR 42k) | Up to 51% (DIRT + PRSI) |
| Lithuania | 15% | 20-32% | 15% |
| Romania | 16% | 10% flat | 8% |
| Malta | 35% (5-6.5% effective) | 35% | 0% (via 6/7 refund structure) |
| Estonia | 0% retained / 20% distributed | 20% flat | 20% |
| Latvia | 0% retained / 20% distributed | 20-31% | 20% |
| Poland | 19% (9% small) | 12-32% | 19% |
| Netherlands | 19-25.8% | Up to 49.5% | 26.9% (box 2) |
| Spain | 25% | Up to 47% | 19-30% |
| Italy | 24% | Up to 43% | 26% |
| France | 25% | Up to 45% | 30% (PFU flat tax) |
| Sweden | 20.6% | Up to 52% | 30% |
| Germany | ~29-33% | Up to 47.5% | 26.375% |
| Denmark | 22% | Up to 55.9% | 27-42% |
Rates as of 2026. Personal income tax thresholds vary significantly. Effective rates depend on income structure. Cyprus Non-Dom figures assume dividend income from non-Cypriot sources under the 60-day residency rule. Sources: KPMG Tax Rate Survey 2025, European Commission taxation database, PwC Worldwide Tax Summaries.
Our advisors help entrepreneurs and investors structure their Cyprus residency and company setup from start to finish.
Frequently Asked Questions
Which EU country has the lowest taxes overall?
It depends on income type. Hungary has the lowest corporate rate at 9% and a 15% flat personal income tax. Bulgaria has 10% corporate and 10% personal income tax. However, for an entrepreneur extracting dividend income, Cyprus Non-Dom offers the lowest combined effective rate: 15% at the company level and 2.65% GHS at the personal level, with 0% dividend income tax for 17 years.
Does Cyprus appear on any EU tax haven blacklist?
No. Cyprus is a full EU member state and is not on the EU list of non-cooperative jurisdictions for tax purposes, nor on any OECD or FATF list. Its tax rates are low but the system is fully OECD BEPS-compliant and subject to EU anti-avoidance directives.
Is Ireland or Cyprus better for a holding company?
Ireland's 12.5% rate applies only to trading income - passive holding income is taxed at 25%. Cyprus at 15% applies to all income types. For a holding company receiving dividends from subsidiaries, Cyprus is generally more efficient: the 0% withholding tax on outbound dividends is matched by most of Cyprus's 65+ tax treaties, making it a cleaner dividend distribution structure than Ireland.
Can I move to Cyprus just for tax reasons?
Yes. Tax-motivated relocation is legal and widely practiced. The requirement is genuine residency - under the 60-day rule, you need to spend at least 60 days in Cyprus per year and not be tax resident elsewhere. A company with genuine substance (director, registered address, bank account, real operations) is required to access the 15% corporate rate.
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