Denmark generally has the highest top statutory personal income tax rate in Europe, reaching 55.9%, followed closely by France (55.4%), Austria (55%), and Spain (54%), according to recent data. However, "highest tax" can also mean overall tax burden, where Denmark also leads as a share of GDP, funded by these high taxes that support extensive social services, notes Euronews.com, The Telegraph, and Tax Foundation.
Among European OECD countries, the average statutory top personal income tax rate lies at 42.8 percent in 2025. Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) have the highest top rates. Hungary (15 percent), Estonia (22 percent), and the Czech Republic (23 percent) have the lowest top rates.
In 2022, the United Kingdom was ranked 16th out of the 38 OECD countries in terms of the tax-to-GDP ratio. 1. In this note, the country with the highest level or share is ranked first and the country with the lowest level or share is ranked 38th. Equal to the OECD average from value-added taxes.
Among 27 European countries covered in the index, overall scores range from 45.8 in France to 100 in Estonia. That means Estonia has the most competitive and neutral tax system whereas France has the worst score.
Bulgaria opens our list as the country that has one of the lowest tax rate in Europe. The country's 10% flat rate of both personal income and corporate income taxes is among the lowest in the European Union. The social security tax rate in Bulgaria is 24.7-25.4% of the employee's gross salary.
There isn't one single "highest tax paying country" as it depends on the type of tax (income, sales, etc.) and income bracket, but countries like Ivory Coast, Denmark, Finland, and Japan consistently rank highest for top personal income tax rates, funding extensive social welfare systems. For overall tax burden on labor, Belgium often leads, while Scandinavian nations are known for high income taxes funding public services.
High-Income Taxpayers Paid the Majority of Federal Income Taxes. In 2022, the bottom half of taxpayers earned 11.5 percent of total AGI and paid 3 percent of all federal individual income taxes. The top 1 percent earned 22.4 percent of total AGI and paid 40.4 percent of all federal income taxes.
However, France's overall tax burden remains much higher than the UK's. The OECD data showed Denmark had the highest tax burden as a share of GDP in 2024, at 45.2pc, followed by France at 43.5pc, well ahead of the UK's overall tax burden of 34.4pc of GDP.
£12,570 to around £50,000: on that bit you pay 20%. Then, above £50,000, up to £100,000: you're paying 40%. From £100,000 up to £125,000: you're effectively paying 60%. And then above £125,000 on money earned above that: you're paying 45% in tax.
Is income tax higher in the UK or Spain, and do UK residents pay taxes in Spain? Income tax rates in Spain range from 19% to 47%, while in the UK, they range from 20% to 45%. Spain offers several tax benefits to foreign residents, potentially reducing the overall tax burden.
It is important to note that even among similar professions, the average salaries in Canada might be slightly higher than in the UK, which is a valuable consideration in connection with the slightly higher cost of living.
Which European country has the lowest cost of living?
The cheapest countries to live in Europe are Belarus, Ukraine, Russia, Kosovo, and North Macedonia. While Europe includes several countries with a high CoL, such as the UK, France, and Norway, there are also many attractive EU destinations at the cheaper end of the spectrum.
The tax introduced by François Hollande as the 75% tax is in fact an additional employer contribution of 50% which when existing social security charges are added reaches 75%.
Among Europe's top five economies, Germany has the highest personal average tax rate at 37.4%. Italy follows with 30.4%, which is 7 percentage points lower. France sits in the middle at 28%. The UK has the lowest rate at 21.4%, with Spain slightly above at 22.5%.
There isn't one single country with the absolute lowest tax rate, as it varies by income type (personal vs. corporate) and residency, but several nations offer zero personal income tax, including the United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, and the Bahamas, making them top contenders for lowest overall tax burden, while countries like Hungary offer extremely low corporate taxes (9%).
Living in Europe can be less expensive than living in the U.S. and can offer a high quality of living. Before deciding to move to a European country, however, it's important to see how your income fares against the costs you may incur.
It reveals that the highest taxes are in Malta, Portugal, Germany, Italy and France, while the lowest are in Romania, Cyprus, Ireland, Bulgaria and finally Hungary at the bottom of the list with the lowest tax rate. The European average is 21.5%, leaving eighteen countries above and fifteen below.
The tax-to-GDP ratio varied significantly between EU countries in 2024, with the highest shares of taxes and social contributions as a percentage of GDP being recorded in Denmark (45.8%), France (45.3%), Belgium (45.1%), Austria (43.8%), Luxembourg (42.7%), Italy (42.6%), Sweden (42.5%) and Finland (42.3%).
Belgium, Norway, Spain, and Switzerland are the countries that raised revenue from net wealth taxes on individuals in 2019 with net wealth taxes accounting for 1.1% of overall tax revenues in Norway, 0.55% in Spain, and 3.6% in Switzerland for 2017.
The UK's economy and the structure of its workforce also play a crucial role in shaping its tax system. With a significant portion of the economy centred around services, the government relies heavily on Income Tax and National Insurance contributions, which are relatively high compared to other types of taxes.
