The corporate income tax in Europe

The corporate income tax is the main tax applicable to corporations across the EU. However, it is not the only one and investors need to consider the taxation regime as a whole when opening a company in a certain country. Other taxes for companies that are generally applicable throughout all of the states mentioned in this article include the stamp duty, the real estate tax, the social security contributions for employers.

The corporate tax compliance rules are set forth by each member state’s tax authorities. It is also important to note that investors will need to observe the conditions for registration for tax purposes upon incorporation and the filing requirements. As a general rule, the corporate income tax usually applies to the worldwide profits of a resident company. For branches in an EU country, the corporate income tax will apply only to the profits derived from the activities performed in that country.

Double taxation relief is possible across the EU via the numerous double tax agreements signed by member states. These allow for a single point of taxation for those companies that derive income from two or more member states.

What to consider when opening a company in Europe

Relocating the business to Europe or expanding to the EU market are two interesting options for corporations or entrepreneurs who are already established in other markets, like the United States for example. However, working with a local team of company formation experts has a series of notable advantages, especially in terms of EU law compliance.

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