Let’s take a closer look at the most important EU low-tax countries, regarding only the corporate taxes. Members states of the European Union are not famous anymore for their low-tax financial centers because Europe is a clear tax hell high tax community. However, Luxemburg, Malta, Cyprus, Ireland and the UK were well-known offshore jurisdictions. Hungary, Romania, and Bulgaria were also great locations for tax planning, before joining the European Union.

On the other hand, tax competition is still alive, and the member states are trying to attract the investors from in and outside of the European community. And low corporate taxes mean more investors.

I created two rankings, one for the effective tax rates, included the Maltese 6/7 tax refund and the particular zones of the Canary Islands and Madeira. And a second, a shorter list which will be the official and highlighted ranking.

EU low-tax countries ranking

6-7. Cyprus and Ireland both have a corporate tax rate of 12,5%. Of course, there are several tax incentives, and it is not a coincidence that these countries work as magnets for foreign investors.

5. Bulgaria is the 5th on the list with its 10% corporate tax rate. The attractive feature of Bulgaria’s tax system is that the personal income tax is also a flat rate of 10%.

4. Hungary lowers its corporate tax rate to a flat 9% from 2017. It will be the lowest official corporate tax rate in the European Union!

3. Malta‘s corporate tax rate is a frightening 35% burden. However, in the case of non-resident shareholders, the effective tax rate is only 5% with the 6/7 tax refund system.

2. Madeira has a reduced corporate income rate of 5%, until 2027. On the other hand, it’s only for Madeira, which is part of Portugal (with a 21% corporate tax in the mainland).

1. Canary Islands
Spain‘s beautiful paradise islands have a corporate tax rate of 4% for the companies registered in the Special Economic Zone(ZEC). Normally, Spain is one of the worst tax hells of Europe and in particular for trading firms and self-employed people. Somehow, the Canary Islands are different.

What happens, when we don’t count with the European special tax regimes?

The official EU low corporate tax ranking

3. Cyprus and Ireland
2. Bulgaria
1. Hungary
And this will be the real and official ranking among the EU countries from 2017.

Are you interested in forming a company in Hungary? Do you want to know more about the flat 9% corporate tax and the flat 16% personal income tax? I am Hungarian and believe me; I never thought that one day Hungary would be a low-tax jurisdiction (again)! However, I know the best lawyers, the outstanding accountants, and the decision makers. So, if you want to use the new tax benefits of Hungary and want to work with the professionals you need, just: Contact me here!