Recent Changes in Statutory Corporate Income Tax Rates in Europe

September 10, 2020

Over the last two decades, corporate income tax rates have declined around the world. Today’s map shows the most recent changes in corporate tax rates in European OECD countries, comparing how combined statutory corporate income tax rates have changed between 2017 and 2020. The average tax rate of all European countries covered has declined from 22.8 percent in 2017 to 21.9 percent in 2020.

Combined statutory corporate income tax rates capture central and subcentral corporate income tax rates. Statutory tax rates do not necessarily reflect the actual tax burden of a business as they do not capture adjustments in the tax base. Effective corporate income tax rates, on the other hand, reflect both statutory tax rates and provisions impacting the tax base, such as capital allowances, inventory valuation methods, or international tax rules.

Recent changes in statutory corporate income tax rates in Europe, 2020 corporate tax trends in Europe


Belgium lowered its combined statutory corporate income tax from 34 percent in 2017 to 29.6 percent in 2018. In 2020, the rate was further reduced to 25 percent. Since 2018, small and medium-sized businesses are subject to a reduced rate of 20 percent on the first €100,000 (US $118,000) in taxable profits.


France currently levies a standard top corporate income tax rate of 31 percent and a 3.3 percent surcharge, resulting in a combined statutory rate of 32.02 percent. In 2017, France levied a temporary one-off surtax on corporate profits of businesses with revenues exceeding €250 million (US $295 million) at a rate of 10.7 percent. This surtax was removed in 2018, reducing the top combined statutory rate from 44.4 percent in 2017 to 34.4 percent in 2018. France has further rate cuts scheduled, leading to a combined rate of 25.8 percent by 2022.


In 2019, Greece reduced its corporate rate from 29 percent to 28 percent, and then to 24 percent.


Latvia adopted a cash-flow tax model in 2018, replacing its business income tax. Under the new model, corporate income taxes will only be collected when profits are distributed to shareholders. Although this tax reform resulted in a corporate tax rate of 20 percent compared to a rate of 15 percent in the previous system, a cash-flow tax significantly improves the competitiveness of a tax code.


Luxembourg’s combined corporate income tax rate has been reduced gradually from 27.1 percent in 2017 to 26 percent in 2018, 25 percent in 2019, and 24.9 percent in 2020.


Norway reduced its corporate tax rate from 24 percent in 2017 to 23 percent in 2018 and 22 percent in 2019.


Portugal is one of the three European countries covered in today’s map that has increased its top combined corporate tax rate (with Turkey and Latvia). In 2018, Portugal’s state surcharge was increased from 7 percent to 9 percent on profits exceeding €35 million (US $41 million), resulting in an increase in the top combined rate from 29.5 percent to 31.5 percent.


Sweden legislated a decrease in its corporate tax rate, from 22 percent in 2018 to 21.4 percent in 2019. A further reduction to 20.6 percent is scheduled for 2021.


In 2018, Turkey increased its statutory rate from 20 percent to 22 percent for the years 2018, 2019, and 2020.

Changes in Top Combined Statutory Corporate Income Tax Rates in European OECD Countries
Country 2017 Tax Rates 2018 Tax Rates 2019 Tax Rates 2020 Tax Rates

Belgium (BE)

34.0% 29.6% 29.6% 25.0%

France (FR)

44.4% 34.4% 34.4% 32.0%

Greece (GR)

29.0% 29.0% 28.0% 24.0%

Latvia (LV)

15.0% 20.0% 20.0% 20.0%

Luxembourg (LU)

27.1% 26.0% 25.0% 24.9%

Norway (NO)

24.0% 23.0% 22.0% 22.0%

Portugal (PT)

29.5% 31.5% 31.5% 31.5%

Sweden (SE)

22.0% 22.0% 21.4% 21.4%

Turkey (TR)

20.0% 22.0% 22.0% 22.0%

Source: OECD, “Tax Policy Reforms 2020,” Sept. 3, 2020,; OECD.Stat, “Tax Database: Table II.1 Statutory corporate income tax rate,” 2020,

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A 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.

A capital allowance is the amount of capital investment costs, or money directed towards a company’s long-term growth, a business can deduct each year from its revenue via depreciation. These are also sometimes referred to as depreciation allowances.

International tax rules apply to income companies earn from their overseas operations and sales. Tax treaties between countries determine which country collects tax revenue, and anti-avoidance rules are put in place to limit gaps companies use to minimize their global tax burden.

The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.

A 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.

The average tax rate is the total tax paid divided by taxable income. While marginal tax rates show the amount of tax paid on the next dollar earned, average tax rates show the overall share of income paid in taxes.