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Income tax in European countries 2021

Comparison of income tax in European countries in 2021

2021-01-06
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When planning to move your business to another country, it is recommended that you familiarize yourself in advance with income taxes in European countries in 2021. In these jurisdictions you can start a business from scratch or buy a ready-made company, get a residence permit for investment. To clarify the nuances of moving to EU countries, contact our experts at IT-OFFSHORE.

How does the profit tax differ in different countries

Corporate income tax in 2021 is levied on corporate income. It is paid by businesses and organizations established in Europe. They have legal entity status and pay the levy regardless of monthly turnover or the number of employees.

Hungary

The corporate tax rate is one of the lowest - 9%. If the company's turnover is over 500 million forints, the rate increases to 19%. The amount of VAT may vary depending on the activity of the company. The rates may be 5, 18, or 27%. There is no capital gains tax.

Montenegro

The rate is 9% of the taxable base. The fee is levied on both residents and non-residents who carry out commercial activities in the country. The tax period is 1 year. The declaration must be filed no later than 3 months after the end of the tax period. If payment is overdue, interest is accrued. Capital gains are included in taxable income.

Bosnia and Herzegovina

The corporate tax rate is 10%, and distributed dividends will be taxed at a zero rate. The basic rate of VAT is 17%. The personal income tax rate is 10%.

Liechtenstein

The corporate tax rate is 12.5% one of the lowest in Europe. There is a special tax regime for private property organizations. There are no fees on dividends, capital gains, and payment of interest income. Royalty is not subject to withholding tax. The standard amount of VAT is 8%, and there is a preferential rate of 2.5%.

Ireland

The basic rate of income tax for residents is 12.5%. Profits from passive activities are taxed at a higher 25% rate. Tax is imposed on the payment of interest income and capital gains. The basic level of VAT is 23%, but there are also preferential rates - 13.5%, 9%, and 0%.

Lithuania

The basic rate of corporate tax is 15%, but there is a reduced rate of 5%. There is a possibility of using a reduced rate if the company's income is less than 30 thousand euros and the number of employees is not more than 10. The standard level of VAT is 21%. Tax on dividend payments is 15%.

Serbia

The basic rate of corporate tax is 15%. Standard rate of VAT is 20%, and reduced rate is 10%. Capital gains will be taxed at a rate of 15%. The personal income tax rate is 15%.

Slovenia

The rate of income tax is 19%. The value-added tax rate is 22%, and there is a possibility of applying a reduced rate of 9.5%. The rate of capital gains tax can range from 0 to 25%.

Estonia

The amount of the levy on profits is 20%. The benefit for companies registered in the country is that there is no need to pay income tax before distributing dividends. Corporate income tax only appears when dividends are distributed. This is the uniqueness of the country's tax system. The amount of VAT is 20%, and there is a preferential percentage of 9, 0.

Latvia

The distributed profits of a company are taxed at the rate of 20%. Capital gains from sale of shares are taxed. Companies operating in FEZ can get tax benefits and reduce costs by 80%. The basic VAT rate is 21%, and there are preferential rates of 12%, 0%.

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