Corporate Income Tax Rates in Europe, 2021

European countries—like almost all countries around the world—require businesses to pay corporate income taxes on their profits. The amount of taxes a business ultimately pays on its profits depends on both the corporate tax base and the corporate tax rate. Today’s map shows how statutory corporate income tax rates compare across European OECD countries.

Taking into account central and subcentral taxes, Portugal has the highest statutory corporate income tax rate among European OECD countries, at 31.5 percent. Germany and France follow, at 29.9 percent and 28.4 percent, respectively. Hungary (9 percent), Ireland (12.5 percent), and Lithuania (15 percent) have the lowest corporate income tax rates.

On average, European OECD countries currently levy a corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. rate of 21.7 percent. This is below the worldwide average which, measured across 177 jurisdictions, was 23.9 percent in 2020.

European OECD countries—like most regions around the world—have experienced a decline in corporate income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rates over the last decades. In 2000, the average corporate tax rate was 31.6 percent and has decreased consistently to its current level of 21.7 percent.

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