Corporate Tax

Company Tax Traits in Europe, 2018-2021

Corporate tax rates have fallen worldwide over the past two decades. Today’s map shows the recent changes in corporate tax rates across OECD European countries and compares how the combined statutory corporate tax rates changed between 2018 and 2021. The average tax rate of all recorded European countries fell from 22.8 percent in 2018 to 21.8 percent in 2021.

Combined statutory corporate tax rates capture central and sub-central corporate tax rates. Statutory tax rates do not necessarily reflect the actual tax burden of a company as they do not take into account adjustments in the tax base. Effective corporate tax rates, on the other hand, reflect both statutory tax rates and provisions that affect the tax base, such as capital discounts, inventory valuation methods or international tax regulations.

Belgium

Belgium cut its combined statutory corporate 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 have had a reduced tax rate of 20 percent on the first 100,000 euros (118,000 US dollars) of taxable profits.

France

France levies a uniform top tax rate of 27.5 percent and a surcharge of 3.3 percent, which results in a combined statutory rate of 28.41 percent. In 2017, France imposed a temporary one-time surcharge of 10.7 percent on corporate profits of companies with a turnover of more than 250 million euros (295 million US dollars). This surcharge was abolished in 2018, reducing the statutory top tax rate from 44.4 percent in 2017 to 34.4 percent. France has planned further rate cuts that will result in a combined rate of 25.8 percent by 2022.

Greece

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

Luxembourg

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

Norway

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

Sweden

Sweden has enacted a reduction in its corporate tax rate from 22 percent in 2018 to 21.4 percent in 2019. In 2021, Sweden further lowered the corporate tax rate to 20.6.

Switzerland

The combined corporate tax rate in Switzerland fell from 21.1 percent to 19.7 percent in 2021. While the federal corporate tax rate remained unchanged at 8.5 percent, the representative corporate tax rate of the sub-central state fell from 14.4 percent to 12.9 percent .

Turkey

In 2018, Turkey increased its statutory tax rate from 20 percent to 22 percent for 2018, 2019 and 2020. In 2021, it increased it further to 25 percent.

Changes in the highest combined corporate tax rates

country Tax rates 2018 Tax rates 2019 Tax rates 2020 Tax rates 2021
Belgium (BE) 29.6% 29.6% 25.0% 25.0%
France (FR) 34.4% 34.4% 32.0% 28.4%
Greece (GR) 29.0% 28.0% 24.0% 24.0%
Luxembourg (LU) 26.0% 25.0% 24.9% 24.9%
Norway (NO) 23.0% 22.0% 22.0% 22.0%
Sweden (SE) 22.0% 21.4% 21.4% 20.6%
Switzerland (CH) 21.1% 21.1% 21.1% 19.7%
Turkey (TR) 22.0% 22.0% 22.0% 25.0%

Source: EU, “Taxation trends in the European Union”, June 24, 2021, https://op.europa.eu/en/publication-detail/-/publication/d5b94e4e-d4f1-11eb-895a-01aa75ed71a1/language- de; OECD, “Tax Policy Reforms 2021: Special Edition on Tax Policy during the COVID-19 Pandemic”, April 21, 2021, https://www.oecd.org/ctp/tax-policy-reforms-26173433.htm; and OECD.Stat, “Table II.1 Statutory Corporate Income Tax Rate”, 2021, https://stats.oecd.org/Index.aspx?DataSetCode=CTS_CIT#.

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