Where to Pay the Lowest Taxes in Europe

Countries in Europe with the Lowest Taxes

When considering a move abroad, it is important to research which countries have the lowest tax rates.
Many believe that to find a place with low taxation, one must look outside of Europe.
However, there are countries within the continent where the tax burden is light, and there is a desire to attract foreign capital and young workers, especially in the fields of innovation and technology.

Transferring to the Canary Islands for Lower Taxes

Despite being geographically close to northwestern Africa, the Canary Islands are part of Spain.
While many consider them a tax haven, they actually operate under a different tax regime with low pressure authorized by the European Commission due to their border territory status.
The tax advantages aim to prevent depopulation of the islands and encourage investment in the local economy.
They offer tax exemptions for those who invest in their business.

The tax system includes an indirect general tax on consumption (similar to VAT) at 7%, and an optional direct estimation with a 20% rate (for new businesses with turnover up to €150,000) with a 20% reduction in the taxable base, or a module taxing only 2% of the taxable base calculated using specific coefficients.

Transferring to Bulgaria for a Flat Tax

Bulgaria offers an interesting tax option with a flat 10% personal income tax rate since 2008 for residents with fiscal domicile in the country.
To benefit from this favorable tax system, one must reside in Bulgaria for at least 183 days per year, have fiscal residency, and significant interests in the country.

Relocating to Malta for Tax Savings

Malta is also attractive from a tax perspective.
Personal income taxes are based on income brackets ranging from 0% to 35%.
There are deductions and no tax areas, which increase for married individuals or those with children.
For instance, the tax rate is 0% for incomes up to €9,100 for singles and up to €12,700 for married individuals.
The tax system in Malta follows a progressive structure with varying rates and deductions.

Settling in Andorra for a Tax Haven

Andorra, a microstate between France and Spain, is considered a tax haven.
Residents benefit from a tax-free allowance up to €24,000 and face a 5% flat tax rate for incomes between €24,000 and €40,000, and a 10% flat rate for incomes above €40,000.
Moreover, Andorra boasts the lowest VAT rate in Europe at 4.5% on goods and services, making it an attractive destination for athletes, digital nomads, and influencers seeking favorable tax conditions.