Countries with the Highest Taxes

If you are thinking about relocating to Europe, be aware that some of the countries have extreme tax rates. These figures are based on the average tax rate on earnings, including income, social security and healthcare. Because of the European Union, many of these economies are intertwined and dependent on one another. The average income tax in Europe is 42%.

Poland

43.7%

Poland has a very high economic growth rate for Eastern Europe, growing at 6% per year. This is largely due to its liberation from the Soviet Union, in which it has entered the world capitalist market. Its agricultural market is not very efficient, but most of the workforce is involved in the industrial and service industries. Expatriates pay the same taxes as natives in Poland. Special taxes, apart from income, range anywhere from owning a dog, to driving a car or bus.

Finland

44.1%

Finland has a highly developed industrial and mainly developed agricultural economy. Income taxes increase dramatically according to the amount you make. Finland is a major player in the world economy, and its citizens have a high GDP that is equal to those in Western Europe. There are many natural resources that are exploited in Finland, such as timber and water. However, there is a high rate of unemployment (7%) that is impaired by the high employer-paid social security taxes.

Netherlands

44.4%

The Netherlands is a founding member of the EU and WTO. It is one of the most lassiez-faire economies in the world. They have fairly low unemployment (4%), and most of the workforce is involved in service industries. Income taxes range from 33-52%, and you must pay rental tax.

Click here for information on expatriates taxes.

Italy

45.2%

Italy has countless different types of taxes, ranging from national to local to income to government services. Everyone in Italy has a tax number, or a codice fiscale. You must pay taxes if you are employed for over 183 days, whether or not you are a resident Italian. The GDP in Italy is high, and the Northern economy is more industrial while the Southern is more agricultural.

Sweden

47.9%

Sweden has a mixed economy, which is based on timber, hydropower and iron ore. The high standard of living is a mix of GDP and its welfare system (obviously aided by the taxes). They have a unique economy, based on close cooperation between labor unions, corporations and the government. Though the government has been lowering taxes, they are still very high.

Austria

48.1%

Austria has many different types of taxes, from rental income tax, to capital gains tax, to property tax. Businesses are required to pay a multitude of taxes as well. Austria has a high standard of living and a well-developed market economy.

France

50.2%

Every year in France, the Parliament examines which taxes will be applied and which will be levied, or collected by public administration. There are many collection institutions; taxes are collected by the government and local collectivities, and the social deductions are collected by social security. You will be taxed if you own a home, reside, work or do business with France. There is a long list of different taxes you are responsible for in France, such as professional tax, housing tax, or corporate tax. Stamp acts call for taxes on inheritance, gifts, and registration of vehicles. France has the fifth largest economy in the world. Large sectors include industry, services, energy, agriculture, tourism and weapons.

Hungary

51%

The highest taxes in Eastern Europe, Hungary has a system where the taxes increase according to your income. Foreign nationals are not exempt to this rule, who are required to register as taxpayers, even if they receive income from abroad. Income tax ranges from 18-36%. However, if you do not receive health care in Hungary, you are not required to pay this tax.

Click here for more information about tax rules. There are additional rules for rental, business and corporate taxes.

Germany

52.5%

Germany has high taxes, which nationals and expatriates are required to pay throughout the year. Those who make an income lower than a certain amount are exempt from taxes (7,664 Euros for a single person, 15,329 for a married couple). Incomes up to 52,152 Euros pay taxes from 15-42%, and 42% for anything over. Then there is an additional “solidarity surcharge,” 5.5% of the tax, that pays for integrating East German former states. Apart from income, there are about 30 different types of taxes. There is a church tax, but you can be exempt if you choose not to affiliate with it. Consumer products are taxed, and items such as tea, coffee, gasoline and alcohol are taxed extra on top of this. Germany has the strongest economy in Europe. It is a social market economy that is greatly export-oriented; it is the world’s leading exporter of merchandise. However, there is a high unemployment rate of 7.3%.

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Belgium

55.1%

The tiny nation of Belgium has the highest taxes in the world, and the highest for a single earner. You are exempt if you make below 6040 Euros, but taxes range anywhere from 25%, to 50% for incomes over 32,270 Euros. There are also communal and regional taxes, which are around 6%. Most goods and services are taxed at 21%. Income taxes are deducted by employers on a pay as you earn basis. Belgium has few natural resources, and its economy is heavily import based, but there are some industrial regions. Unemployment is 6.5%.

Click here for advice on taxes in Belgium.

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