While it’s a rare feat to reside and pay zero taxes in Europe, it’s possible to live there and pay low taxes. Here is a list of the European countries with the lowest taxes:
Income Tax Rate 🔼
|Bosnia and Herzegovina||10%|
Bulgaria has a flat tax rate as low as 10% and a corporate tax of the same rate. The country maintains tax treaties, which allow many international entrepreneurs to enjoy special tax treatments.
By living in Bulgaria for over 183 days in a year, you can become a fiscal resident. Whereas living in the country is easy, you have to convince the tax office that Bulgaria has a place in your heart.
For this, you take the 'center of life test’ that gives you more flexibility.
Malta has several tax-friendly programs to lower taxes for individuals and corporations, making taxes in the country as low as 5%. Entrepreneurs can establish residency in Malta without actually having to live there.
Citizens aren’t required to pay taxes on revenue generated outside Malta, provided the income isn’t used within the country. They also don’t pay tax on foreign capital, even if wired to a Malta bank account.
Other incomes are taxed once at a flat rate of 15%. The minimum cost of maintaining Maltese residency is 15,000 euros, payable every year.
Although Gibraltar isn't a sovereign county but a British Overseas Territory, it's able to establish its tax priorities. You can become a resident of Gibraltar in two ways: form a company or show a high net worth.
High Executive Possessing Specialist Skills (HEPSS) allows business owners owning Gibraltar companies to pay low taxes on their earnings. You should earn above 120,000 euros per year but will only be subjected to a flat tax of 29,940 Euros.
Secondly, you’re required to have a net worth of roughly $2.5 million, then purchase or lease a qualifying home in Gibraltar. You’ll also need to pay an annual tax ranging from 22,000 to 28,360 Euros based on progressive but regressive tax rates from 10% to 29%.
Monaco isn't a full member of the European Union but a de facto participant in the borders Schengen Area with excellent mobility. The country's income tax rate stands at 0%, and corporate income taxes are 25% from January 2022.
Monaco isn’t a tax haven; foreigners are allowed to establish residence just by proving their net worth. Typically, you’re required to make bank deposit of 500,000 euros and purchase or lease property in the country.
For the first nine years, you must spend three months per year. After that, you obtain a permanent residence that requires 183 days per year.
Montenegro’s tax rate stands at 9%. The country is ideal for setting up a residency for companies that wish to pay low taxes and maintain a presence in their home country.
By purchasing residential property in Montenegro, foreigners are given a temporary residence card to be renewed annually. Residents who spend below 183 days in the country are mostly not taxed.
Those who spend more than 183 days or wish to establish a permanent residence must pay the 9% tax.
Income Tax Rate
|Bosnia and Herzegovina||10%||2023-12|
|Isle of Man||20%||2023-12|
While the country of Malta has one of the lowest tax rates -- 5%, residents of several countries and territories, including Vatican City, Tokelau, Niue, Falkland Islands, Montserrat, Saint Pierre and Miquelon, Saint Barthelemy, Tuvalu, Wallis and Futuna, and Nauru all have the opportunity to pay as little as 0% in taxes.