What is Corporate Tax Trends Europe ?
The rates of corporate income tax have been declining across the world over the last two decades. The map below shows the most recent shifts in corporate tax rates across European OECD countries, comparing how statutory corporate income tax rates changed from 2018 to 2021. The tax rate average of all European countries is down between 22.8 per cent in 2018 to 21.8 per cent in 2021.
Combining corporate income tax rates that are statutory are a comprehensive set of subcentral and central corporate tax rates. The statutory tax rates are not always a reflection of a company’s tax burden because they do not account for changes in the base of taxation. In contrast, tax rates for effective corporations reflect the tax rate of statutory law and rules that affect the tax base, like capital allowances, inventory valuation methods, or international tax laws.
Belgium
Belgium reduced its corporate income tax to 34 per cent for 2017 up to 29.6 per cent in 2018. For 2020, this tax rate was reduced further by 25 per cent. From 2018, medium- and small-sized companies are covered by a lower amount of 20% for the first 100,000 euros (the US $118,000) in tax-deductible profits.
France
France is a country with the standard top corporate tax at 27.5 per cent and an additional 3.3 per cent surcharge, which results in the combined rate being 28.41 per cent. In 2017 France introduced a one-time surtax on the profits of companies with revenues of more than EUR250 million (the US $295 million) at an amount of 10.7 per cent. The surtax was eliminated in the year 2018, reducing the top combined percentage from 44.4 per cent as of 2017 down up to 34.4 per cent. France is also preparing to cut rates further. They are planned, resulting in a combined rate of 25.8 per cent in 2022.
Below is Corporate Tax Trends Europe
| Country | 2018 of Tax Rates | 2019 of Tax Rates | 2020 of Tax Rates | 2021 of Tax Rates |
|---|---|---|---|---|
| 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, https://op.europa.eu/en/publication-detail/-/publication/d5b94e4e-d4f1-11eb-895a-01aa75ed71a1/language-en; OECD, “Tax Policy Reforms 2021: Apr. 21, 2021, https://www.oecd.org/ctp/tax-policy-reforms-26173433.htm; and also OECD.Stat, “Table II.1 of Statutory corporate of income tax rate,” 2021, https://stats.oecd.org/Index.aspx?DataSetCode=CTS_CIT#. | ||||
In 2019, Greece reduced its corporate rate from 29 per cent to 28 per cent before dropping to 24 per cent.
Luxembourg
Luxembourg’s corporate tax was cut gradually by 27.1 per cent as of 2017 to 26 per cent in 2018 and 25 per cent in 2019, and 24.9 per cent in 2020.
Norway
Norway had reduced the corporate tax rate to 24 per cent from 2017 to 23 per cent in 2018, and then 22 per cent in 2019.
Sweden
Sweden approved a reduction in its corporate tax rate between 22 and 21.4 per cent in 2019. Then, in 2021 Sweden also reduced its corporate tax to 20.6.
Switzerland
The corporate tax rate of Switzerland’s combined corporations decreased by 21.1 per cent to 19.7 per cent in 2021. The central tax on corporate income was the same at 8.5 per cent, and the sub-central government representative’s Corporate income tax rate fell from 14.4 per cent to 12.9 per cent.
Turkey
In 2018 Turkey increased its statutory rate of 20% to 22% for 2018, 2019 and 2020. In 2021, the rate has increased the rate to 25 per cent.
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