Integrated Tax Rates on Corporate Income in Europe, 2024

For dividends, Eire’s prime built-in tax fee was the very best amongst European OECD international locations (57.1 %), adopted by Denmark (54.8 %) and the UK (54.5 %). Estonia (20 %), Latvia (20 %), and Hungary (22.7 %) levy the bottom charges. Estonia and Latvia’s tax on distributed income signifies that the company revenue tax is the one layer of taxation on company revenue distributed as dividends.

For capital features, Denmark (54.8 %), Norway (51.5 %), and France (51 %) have the very best built-in charges amongst European OECD international locations, whereas Switzerland (19.7 %), the Czech Republic (21 %), and the Slovak Republic (21 %) levy the bottom charges. A number of European OECD international locations—specifically Belgium, Czech Republic, Luxembourg, Slovakia, Slovenia, Switzerland, and Turkey—don’t levy capital features taxes for long-held shares with out substantial possession, making the company tax the one layer of tax on company revenue realized as long-term capital features.

On common, European OECD international locations levy an built-in tax fee on dividends of 40.9 % and 36.6 % on capital features. As compared, america levies a mean built-in prime tax fee of 47 % on dividends and 47.4 % on capital features.

Double taxationDouble taxation is when taxes are paid twice on the identical greenback of revenue, no matter whether or not that’s company or particular person revenue.
of company revenue can result in financial distortions, resembling decreased financial savings and funding, a bias towards sure enterprise types, and debt financing over fairness financing. A number of OECD international locations have built-in company and particular person tax codes to remove or cut back the unfavourable results of double taxation on company revenue.

2024 Notable Modifications

• Over the previous yr, some international locations have raised their statutory company charges, together with the Czech Republic (from 19 to twenty %), Iceland (from 20 to 21 %), Slovenia (from 19 to 22 %), and Turkey (from 20 to 25 %). Others have raised their prime private tax charges on capital features, such because the Netherlands (from 32 to 36 %) and Spain (from 26 to twenty-eight %). In distinction, Austria has decreased its statutory company fee from 24 to 23 %.
• The UK’s authorities is planning to lift the highest fee on capital features from the sale of shares from 20 to 24 %, which might transfer the nation’s built-in tax fee on capital features from 40 to 43 %.