If you live in a country with high tax rates, you may think of changing your tax residency. When we talk about tax havens, most people imagine offshores – tropical islands with zero-tax rates. However, if you look carefully at the taxation landscape, you will find several countries in Europe that could serve as your reliable tax haven! Of course, it is always better to consult a tax advisor before you make a final decision. However, you should at least know that these countries exist!
We would like to invite you to our portal called International Wealth where you will find a lot of articles devoted to wealth accumulation and preservation. Where are the lowest taxes in Europe? Click on the link to look at the list of 15 countries in Europe that you can use to reduce your tax burden. And if you need to open a bank account, set up a company, or acquire residency by investment, we can help you as well.
You can book an initial free session with our experts to get advice on relocation and tax optimization matters. Choosing a proper jurisdiction is not that easy, especially if you don’t know the laws and nuances of the taxation system in the country. However, our specialists do, and they will choose a suitable option for you at no fee after they analyze all the factors that are unique for you. And if you decide to delegate any administrative matters to us, we will be happy to deal with them at a reasonable fee. Book a session without delay!
Low-Tax European Countries
There are many official organizations that compile lists of European countries with the most beneficial tax conditions. And while they are rarely identical, there are some countries that are present in the majority of them. These are:
- Czech Republic
However, we have made our own list of 15 European countries with the most favorable tax regime. Let’s take a look at them in more detail.
Low-Tax European Jurisdictions: Top 15
The standard income tax rate is 10%, and the country’s tax residents use their global income as a base. You will be exempt from inheritance tax, wealth tax, or gift tax. You will be subject to capital gains tax, but only on one condition: you buy real property in Andorra. The country has adopted a progressive taxation system since 2015.
Here are the personal income tax rates:
- 0% on income up to 24,000 euros a year
- 5% on income that varies between 24,001 and 40,000 euros a year
- 10% for income that exceeds 40,000 euros
You will have to pay tax on your bank deposits if it exceeds 3,000 US dollars. The initial capital gains tax is set at 15% and it diminishes with the years of asset possession. If you have possessed the property for 13 years, you can sell it without paying capital gains tax.
The standard income tax rate is the same as in Andorra (10%), and it is payable on any amount of income earned worldwide. However, there are some other taxes you will have to pay in Bulgaria. Let’s take a look at them:
- Social security tax (the employer pays from 14.12% to 14.82%, while the employee is liable for 10.58%)
- Medical insurance tax (which is also jointly payable by the employer (4.8%) and the employee (3.2%)
- Real property tax that ranges between 0.01% and 0.45%.
There is no capital gains tax in Bulgaria.
The standard income tax rate is a bit higher than in the two countries above and equals 15%. Let’s look at some other tax rates:
- Social security tax (13%)
- Medical insurance tax (18.5%)
- Inheritance and gift tax (18%)
- A 9% tax is payable if the residential real estate is inherited or given as a gift
If the property is transferred by one close relative to another one, this transaction is tax-free.
The standard income tax rate ranges between 8% and 30% and it depends on the taxation system you choose. There are two of them: allowance and gross income.
If you opt for the allowance tax system, the income is subject to taxation after allowance subtraction at the following rates:
- 16% for the first 4,000 pounds
- 19% for the next 12,000 pounds
- 41% for the amounts above these
If you decide to use the gross income taxation system, you will be liable at the following rates:
- 8% for the first 10,000 pounds
- 22% for the next 7,000 pounds
- 30% for up to 25,000 pounds
Here are the rates for the income that exceeds 25,000 pounds:
- 18% for the first 17,000 pounds
- 21% for the next 8,000 pounds
- 27% for the next 15,000 pounds
- 30% for the next 65,000 pounds
- 27% for any amount above that
You will also have to pay social security taxes in Gibraltar at the following rates:
- 10% of the employee’s gross income (no less than 12.1 pounds and no more than 36.3 pounds per week)
- 20% of the employer’s gross income (at least 28 pounds and no more than 50 pounds per week)
- 20% of the self-employed person’s gross income (no less than 25 pounds and no more than 50 pounds per week)
You will not have to pay property tax, inheritance tax, gift tax, or wealth tax if you are a tax resident of Gibraltar.
If the income you get does not exceed 11,450 pounds a year, you are not liable for any taxes.
You can also find out more information about available tax deductions from our experts.
Monaco is a great country to live in if you want to pay low taxes. However, there is one serious problem: this is a country for the rich, and you should possess a considerable fortune to become a tax resident. If you can fulfill this condition, you will be able to take advantage of the world’s lowest taxes: no income tax, no property tax, no wealth tax. You will only be required to pay a property rent tax of 1%.
Would you like to read about the remaining 10 countries? Please follow the above link to read the whole article and find the information that can change your life: you may decide to relocate along with your family! If you need any help with tax optimization, bank account, or other matters related to business or money, do not hesitate to book a session!