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Taxes in Europe

Taxes in Europe

Taxes in Europe

We are often reminded that there are only two certainties in life: ‘death’ and ‘taxes’. While death remains the same in every country however, taxes range widely from country to country, and this is no different in Europe. Taxes in Europe are of course a fact of life just as they are anywhere else, but taxes in England for instance are very different from those in Macedonia.

As a quick demonstration of just how much the taxes vary in Europe, here we will look at the maximum income tax that can be charged across European countries. This maximum income rate means that when an individual earns above a certain amount, this is most that the government will charge (normally the percentage you are taxes increases as you move into higher salary bands). This is quite enlightening and demonstrates the great range of taxes in Europe:

 

55%: Sweden

54.3%: Norway

53%: Finland

52%: Netherlands

51.5%: Denmark

50%: Austria, Belgium, UK

46.28%: Iceland

45.5%: Switzerland

45%: Croatia, Germany, Italy, Spain

42%: Portugal

41%: France, Ireland, Slovenia

40%: Greece, Turkey

38.95%: Luxembourg

35%: Malta

32%: Poland

30%: Belarus, Cyprus

23%: Latvia

21%: Estonia, Lithuania

20%: Bosnia & Herzegovina

19%: Slovakia

16%: Hungary, Romania

15%: Czech Republic, Ukraine

14%: Serbia

13%: Russia

12%: Georgia

10%: Bulgaria, Macedonia

9%: Montenegro

 

This is the income tax of those countries at their maximum rate, meaning that you are charged for simply earning a certain amount of money. Of course though it is all subject to change, and in some cases those countries that have lower in come tax may make up the difference elsewhere – with higher VAT or more taxes for local services. Normally this income tax will be deducted from the pay check of the individual so that in a sense they do not ‘miss’ it. On the other hand, those who are self
employed will normally have to efile a ‘tax return’ which will mean they must calculate their net profit – allowing for expenses and investments –at the end of each year themselves. This can be complicated, which is why it’s important to have the right tax software.

The higher taxes in Europe when compared to say the US are a result of most of Europe having more public services. For instance in the US residents pay health insurance premiums in order to use privatised hospitals, whereas most countries in Europe have state-owned medical facilities meaning that these are maintained by tax and in some cases a ‘National Insurance’. The variation across European taxes then also comes from the different political parties in power at any given time. At the same time these taxes go towards a range of other services – for instance benefits for those families that can’t afford to support themselves, funding for arts projects and business start ups, and military expenses. This reflects a more socialist nature in much of Europe when compared to the more capitalist USA and each has different advantages and weaknesses. Those countries that have more left wing parties in power will push towards higher taxes

22 Comments so far

  1. stanka   February 1, 2011 6:30 am

    I can say that taxes in Europe are like death.
    I live in Serbia and we manage very hard with them. And from this list of taxes in Europe we are at the bottom of the list with 14%. I could actually say that we are some of the happy ones. It’s hard for me thinking how people from Sweden can manage with 55% taxes, almost 3 times more than ours…

  2. Swanson   February 1, 2011 12:45 pm

    Taxes in Europe will get to the same level soon. That’s one of the EU’s main goals. To make the taxes in europe have the same cost, no matter the country. If you do some research, you will find this a good thing. I am one of those who want the same level of taxes in europe.

  3. Nelson   February 2, 2011 1:14 pm

    In my opinion, taxes in europe are quite high. Especially when it comes to fuel taxes in europe. We pay too much for fuel here. Americans are way more happier. They don’t have the taxes we have on this continent. That’s why they buy big engine cars.

  4. Angie   February 3, 2011 2:14 pm

    Wow you are right Nelson. The taxes in some of the places seem really high. I live in Iowa and only pay between 5 to 7% depending on which city I am in. I can not imagine paying 55% like Sweden does. That is just crazy.

  5. Brown   February 5, 2011 11:00 am

    Taxes in Europe have rised lately. That’s because of this economical problem we’re facing. Let’s hope we won’t have to live with this taxes in europe forever. Maybe the situation will get better. What do you think?

  6. Jude   February 6, 2011 10:28 am

    Wow, European taxes are quite hefty. I guess as long as I remain under 10%, I should not complain. Brown, let us hope for you sake that taxes in Europe do get better. I think that hopefully the economy will turn itself around.

  7. Andreea   February 9, 2011 6:07 am

    Indeed, like you said, taxes in Europe are so high because of public services. We pay taxes, but compared to private ones, public services aren’t so good. Your example about health completes what I am trying to say…
    I would like lower taxes in Europe. Look on this list. How these countries can manage with 55% or 54% taxes?

  8. George   February 10, 2011 3:21 am

    Taxes in Europe are fixed by the EU mostly. At least that’s what happens in EU member states. In order to standardize the european economy, taxes in europe will need to be standardized too. It’s obvious. But hopefully, the living standards will improve as well.

  9. Marshall   February 10, 2011 5:55 am

    Just added a comment on the article about exchange rates. Which are high for most of us. The same thing goes with taxes in Europe. I understand today’s financial situation and I hope the crisis will end soon. Some people are really overwhelmed by taxes in Europe.

  10. Manny   February 12, 2011 8:12 pm

    I guess I have no room to complain about taxes. I have never paid over 7 percent so that is a fair amount. I could not imagine paying what some of the Europeans pay. I would never want to pay that much!

  11. Taxhater   February 13, 2011 3:28 pm

    I understand why we need taxes. They do provide a lot for our countries. But honestly, do we need to have taxes that high? Look at how low the taxes are in the states. It just does not seem fair to be charging us an ungodly amount for taxes in Europe.

  12. Tysen   February 16, 2011 6:30 pm

    Taxes all over are crazy in my opinion. But in Europe they are absurb. I can not imagine paying that much for taxes. If you lived in some of these countries, most of your paycheck would go towards taxes! Does not sound fair to me.

  13. Villa   February 19, 2011 11:23 am

    Who can afford to have half of the paycheck go to taxes? I can not unless you are going to double my salary. Do Europeans make more than say Americans to do this? Or is the life there much cheaper that they do not need as much to survive on? I would really be interested in knowing.

  14. blacky   February 27, 2011 7:56 am

    Taxes in europe are the reason for many europeans moving out. Lots of them go to america and australia. Some friends of mine even moved to China and Japan. At the moment, taxes in europe aren’t the only expensive taxes. But surely, the situation can be better in other places.

  15. Jack   March 17, 2011 1:58 pm

    I am not even sure what I am paying for taxes. I think that appoximately 25% of my check goes for taxes, and my insurance and anything else I have taken out. So maybe only like 15% goes to taxes? I could not imagine paying what many of the Europeans pay in taxes. That is unreal.

  16. European   May 8, 2011 6:12 pm

    Duh…are you people for real? Your system is progressive as it is in most of European countries so why do you compare your own personal tax % to their maximum %? In US maximum rate is 35% which should be compared to those numbers. You also seem to forget to add your health care insurance costs to your calculations and at least in north Europe (Den,Fin,Nor and Swe) education is paid by taxes so no savings needed to get quality education for your children.

  17. dany   July 14, 2011 12:33 am

    i think you american must consider how much do you pay for instruction for example: in sweden the studies are completely free and you receive money from the government if you live out of your city…is the same in your campus?? Do you have pension when you retire? Do you have completely free sanity?? If you lost your work someone help you and your family?..in the end, i don’t think you are so richer than us…is not bad to live in a place where govrment can provide those service for you….the problem is if the service is not good like in italy, where not everyone pay taxes, and where poluticians use taxes for theyr purpose instead for the people! -An italian that live in sweden-

  18. BenTennison16 EUROPE FTW !   August 25, 2011 9:10 am

    you americans are bashing our countries? You should look at your own first of all. In places like Denmark, Sweden, Norway etc education is completely free …. as is health care. As the other person pointed out, if you lose your job, the state will help you, if you get married and have a child, you get a very generous maternity/paternity leave. Not to mention pentions and other things. In Europe if your poor and less fortunate you can still have a decent life. In america, if your poor, you die.

  19. Keith   December 11, 2011 3:08 pm

    Worth to mention, that 50% does not mean that you pay half of salary just for taxes. Let’s imagine your annual income is 40000 EUR, and taxes are the following
    0-20000eur 20%,
    20001-40000eur 30%
    40001-60000eur 50%

    So for first 20000eur you pay 20%, for next 20000 eur – 30% taxes. Because you do not reach 40001 – you are not paying 50%.

    So I think it is not the same as paying half of earnings just for taxes.

  20. Jenny Y   May 15, 2014 12:33 pm

    I am sure that does not include VAT, Council Taxes, Property taxes, road tax, high fuel and cigarette taxes, not to mention the high cost of housing. We live in an upscale neighborhood in North Carolina and we only pay less than $10,000 a year on a mortgage, utilities, and property tax. My family went to Europe, specifically the UK and everything costs so much more. Europe has to import quite a lot of food, meds, and toiletries which makes it so darn expensive. Ironically the salaries in the UK seem lower than than in the US, especially for business occupations, however restaurant staff make more money.

  21. Jenny Y   May 15, 2014 12:37 pm

    In the US, if a small family makes around $50,000- $60,000, you will essentially pay no tax. Most familes who make under $40,000 will actually get a tax refund, if they have children that can end up being up to $5000 refund for each child.

  22. Jenny Y   May 15, 2014 12:59 pm

    In response to “dany” et al. In America, education is totally free up to the age of 18. Some states even have free college tuition for community colleges, high schoolers, and free state and federal money for college. There are government student loans that are low interest and backed by the federal government. Now there are charter schools in the US, therefore many have a choice of what school to send their children. Even if you have to pay for college, there are many colleges that are extremely inexpensive, such as community colleges and state schools. Some state schools are “Ivy League” quality. In the US, we have unemployment insurance through the federal government, if you lose your job, you will still get compensation, Work First money, free food from food stamps, free healthcare through Medicaid, and utility assistance from the federal government. Also healthcare is completely free for so many Americans such as the poor (Medicare), free healthcare and hospitalization for poor pregnant women, Disability benefits which include money, live-in or drop-in healthcare workers, and healthcare, Social Security benefits for the employed and their families, veterans benefits and healthcare (VA), and senior citizens (Medicare), for everyone else most employers provide private health insurance. You Europeans are not the only ones with social services.

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