The five countries in Europe with the lowest corporation tax

For businesses looking to expand out into the European market after 2016;s EU Referendum, it can be hard to choose where to go. We take a look at the five countries with the lowest corporation tax in Europe.

When you decide to start a business, there are a lot of things that you need to consider. Unfortunately, creating a web site for business, is not the most complex thing that needs to be done in the early development stages. Profit is crucial if you want to achieve long-term success on the market, that is why you must know each cost and how it will affect the overall revenue, however, the most important thing is building a taxation for your company.

Hiring a professional accountant or investing in a quality financial consultant is one way to ensure the future and prosperity of your company. Understanding taxes and knowing how to play by the rules will affect your workflow greatly. Especially corporate tax, which affects your profit at the end of the financial year.

Having this in mind you can make realistic financial projections and business plans for your company. After defining and completion of the financial flow, you can start working on other elements like creating a website for business and online presence.

What is a corporate tax?

A corporate tax is a percentage of your profit that the government takes each financial year. The profit of your company is calculated by deduction of all expenses from the revenue.

No matter how great your performance on the market, if you have to give a high percentage of your money to the government, you will be demotivated about future investments.

Fortunately, there are ways you can lower your corporate tax costs. You just need to find the right country and place where you can start your business.

According to Tax Foundation, countries in Africa and America have the highest corporate tax in the world. Luckily, Europe enjoys the benefits of less restrictive taxation politics.

In the chart, we can see the fluctuation of the corporate tax by region and decade.

Having in mind the above stats maybe you should reconsider again where to invest and open your business. Nowadays, with the usage of the technologies, everything is possible. You can invest in other country and still work remotely using your business website with your team.

In order to make the best investment decision, we compiled a list of top five countries in Europe with the lowest corporate tax.

1. Hungary – 9 per cent

Hungary has the lowest corporate tax rate in Europe. Since they managed to emerge from the EU budgetary discipline measures in 2013 they are heavily forcing the new tax politics in order to attract foreign companies and stimulate the small residential businesses to invest more. Hungary is the perfect place to start your business. On their market, you can also find educated and skilled professionals that you can use to create a business web page or run digital marketing campaigns. Hungary is heaven.

2. Cyprus – 13 per cent

There is a misconception that Cyprus is an offshore tax haven for the wealthiest people in the world. The negative publicity is not true. Cyprus has the best tax regime and tax legalisation that is in full conformity with EU and OECD. In fact, Cyprus is the first country that fully adopted the EU Directives. There is no better place to start your business and create a business webpage. The good investment climate can only be beneficial to you and your company.

3. Latvia – 15 per cent

Latvia is very open for foreign investments and uses their tax rates to directly stimulate the business development and entrance of such companies. The market is filled with skilled professionals which can be arranged for remote work. For instance, you can run your administration work, digital marketing activities and create a business web page by arranging a professional in Latvia. Everything is possible.

4. Poland – 19 per cent

Developing countries have the best taxation politics by rule. This is of course intentionally created to stimulate foreign investment and internal economic growth. Poland has the same politics as well, with only 19% corporate tax you can invest, build and work remotely enjoying many other tax benefits.

5. Czech Republic – 19 per cent

In the Czech Republic, foreign and domestic companies are subject to the same tax treatment. However, foreign capital is taxed at a lower rate of 15 per cent and can undergo an exempt under certain circumstances. CZ government has the same stimulating politics as the other EU countries mentioned on the list.

Final thoughts

EU countries are extremely stimulating for foreign capital. However, before you decide to invest, you need to do a full analysis of all the other regulations so you are familiar with everything your company can benefit from. Europe has great developing countries with stimulating tax politics that can be beneficial for both of the parties in the bargain.

See also: What is corporation tax?

Owen Gough

Owen Gough

Owen Gough is a reporter for SmallBusiness.co.uk. He has a background in small business marketing strategies and is responsible for writing content on subjects ranging from small business finance to technology...

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