EU countries with minimum tax burden in 2022: where to open a business

To open a business in the EU countries with minimum tax burden 2022 means to keep profits and increase prosperity. To achieve this goal it is not necessary to look for an offshore jurisdiction, which can be blacklisted at any time. Low taxes in Europe are real. For example, the corporate tax in the Isle of Man is 0%, in Hungary - 9%, in Bulgaria - 10%. A huge advantage of these jurisdictions is not only low tax rates, but also credibility. Companies registered in these countries have a reliable reputation.

Isle of Man

The lowest corporate tax in the Isle of Man is 0%. It is not part of the EU, but it is so closely tied to it that the jurisdiction cannot be ignored. There is also a 10% tax rate here, which applies to income derived from banking business, retailing with profits of £500k or more. Income from land and property on the Isle of Man is 20%. This includes commercial lettings and mining.

Resident companies are taxed on income earned anywhere in the world. A foreign business that opened a business in Man in 2022 must pay only for income earned in Man. Both resident and non-resident companies are subject to income tax at the same rates.

Hungary

Residents in Hungary are all businesses registered in the country, including foreign companies that are managed here. Foreign enterprises can operate through subsidiaries and start a business in Hungary in 2022, working through a resident company.

The corporate tax rate in Hungary is 9%. With VAT it is not so simple, and much depends on the type of services rendered:

• The general rate is 27%;
• 18% for strategically important products: some milk, cereals, flour;
• 5% - for some medicines, printed matter, live concerts, livestock products (meat, eggs). The rate also applies to fresh milk, Internet access services, local catering organizations.

Some medical, cultural, sports and educational services offered on behalf of the state are exempt from VAT. VAT exemption is available for financial and insurance services.

Bulgaria

Another option for company registration in 2022 is Bulgaria. Any company registered in the country is considered a resident, and is subject to a flat tax rate of 10% on income earned anywhere in the world. There are also tax vacations, which allows companies to reduce the amount of annual tax on profits derived from productive activities.

Income tax exemptions are the following:

• special purpose investment companies;
• investment companies with a closed license;
• collective investment schemes authorized for public offering in Bulgaria.

Dividends are taxed at a rate of 5%. They are exempt from tax in the following cases:

• they are received by a Bulgarian holding company if the subsidiary paying the dividends the company is a resident of an EEA member country, Iceland, Liechtenstein or Norway;
• dividends are paid by a Bulgarian company to other EEA resident entities.

The standard VAT rate is 20%. It can be reduced to 9% if the company provides some kinds of tourist services (our specialists will tell you more about it). Zero rate is for export of goods outside the EU and international shipping of products. Also exempt from VAT are the following:

• some land transactions;
• rental of residential real estate to individuals;
• financial, insurance, educational and medical services;
• gambling.

How to find the country with the minimum tax for opening a business?

If you want to open a business in Europe with a minimum tax burden, contact IT-OFFSHORE and we will find the best option for you.