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5 Countries With Lowest Tax For Entrepreneurs in EU

5 Countries With Lowest Tax For Entrepreneurs in EU


The list below contains five European countries with low or very low taxes for companies and individuals.
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  • Bulgaria: with a corporate income tax of only 10% for companies and individuals, this is an Eastern European country that also has lower costs for employment compared to other EU countries. Dividends from one Bulgarian company to another are not subject to dividend tax.
  • Cyprus: Cyprus has a corporate income tax rate of 12.5%. Dividends received by a company that is a resident of Cyprus are tax exempt (both those received from a Cypriot company and those from a foreign company). The standard VAT rate is 19% with reduced rates of 9, 5 and 0%. These traits can be an advantage for those interested in offshore company formation.
  • Ireland: the corporate income tax rate is 12.5% for trading income and, in general, dividends received by an Irish company from another Irish legal entity are exempt from the dividend tax.
  • Hungary: another EU country with a very low corporate income tax rate of only 9%. Dividends received by a resident company are not subject to tax (an exception applies in case of dividends distributed by a controlled foreign company).
  • Malta: the corporate income tax rate is 35%, however, a special participation exemption system and refund system bring this tax down to 5% and even 0% in some cases. Dividend tax exemptions apply only in some cases. The standard VAT is 18% with reduced 7, 5 and 0% rates.
Other notable countries that also offer a reasonable taxation regime for corporations and are worth mentioning include the following:

  • Latvia: a 20% corporate income tax rate, with a 25% rate applicable to profit distributions and a VAT rate of 21% with reduced rates of 12 and 15%
  • Lithuania: companies are generally subject to a 15% rate, however, micro companies can be exempt from tax at the beginning and the benefit from a reduced rate of 5%; companies that earn income from commercializing scientific research are taxed at a 5% rate. The VAT rate is 21% with three reduced rates: 9, 5 and 0%.
  • Poland: the standard corporate income tax rate is 19% here and a lower rate of 15% is available to small companies (however, this is subject to certain conditions and exemptions). The VAT rate is 23% with two lower rates of 5 and 8%.
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