Top Personal Income Tax Rates in Europe, 2026
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) levy the highest top personal income tax rates in Europe.
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As a nonpartisan, educational organization, the Tax Foundation has earned a reputation for independence and credibility. Our global tax policy team regularly provides accessible, data-driven insights, including a survey of corporate tax rates around the world, from sources such as the Organisation for Economic Co-Operation and Development (OECD), the European Commission, and others.
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) levy the highest top personal income tax rates in Europe.
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More than 175 countries worldwide—including all major European countries—levy a value-added tax (VAT) on goods and services. EU Member States’ VAT rates vary across countries, though they’re somewhat harmonized by the EU.
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Some European countries have raised their statutory corporate rates over the past year, including Estonia, Lithuania, and Slovakia.
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The worldwide average statutory corporate tax rate has consistently decreased since 1980 but has leveled off in recent years. In the US, the 2017 Tax Cuts and Jobs Act brought the country’s statutory corporate income tax rate from the fourth highest in the world closer to the middle of the distribution.
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Developed countries raise tax revenue through individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes—the combination of which determines how distortionary or neutral a tax system is.
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To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.
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Capital allowances play an important role in a country’s corporate tax base and can impact investment decisions—with far-reaching economic consequences.
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As the EU pursues massive changes in public policy as part of its green transition, expect fuel taxes to be central to any policy discussions.
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It’s unlikely these implemented and proposed windfall taxes will achieve their goals of raising additional revenues without distorting the market. Instead, they would penalize domestic production and punitively target certain industries without a sound tax base.
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In most European OECD countries, corporate income is taxed twice, once at the entity level and once at the shareholder level.
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To make the taxation of labor more efficient, policymakers should understand the inputs into the tax wedge, and taxpayers should understand how their tax burden funds government services.
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Although the U.S. has a progressive tax system and a relatively low tax burden compared to the OECD average, average-wage workers still pay more than 30 percent of their wages in taxes.
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