Where in Europe do people pay the highest taxes?

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According to the Tax Foundation, a single average wage worker in Europe paid about a third of their wages in taxes in 2022. Not surprisingly, tax burdens across Europe vary widely, with workers in Western Europe and developed countries paying significantly more.

Countries with the highest personal income tax rates include Denmark (55.9%), Austria (55%), Portugal (53%), Sweden (52.3%), and Belgium (50%).

Meanwhile, the countries with the lowest taxes in Europe are Romania (10%), Bulgaria (10%), Bosnia and Herzegovina (10%), Kosovo (10%) and North Macedonia (10%).

Danish people welcome tax increase

However, surprisingly, not all citizens are dissatisfied with the tax increase, including in Denmark, where taxes can reach an eye-watering 55.9%.

In this case, many citizens see the payment as an investment in the overall future of the country and society, or as buying a certain quality of life. According to the 2023 World Happiness Report, Denmark ranks as the second happiest country in the world for the fourth consecutive year.

This makes the same opportunities available to all strata of society, regardless of gender, socio-political or economic status, and significantly reduces economic and social burdens. Most education, especially higher education, is free in Denmark, and university students are also subsidized by the Danish government.

This support will continue in the workplace, with parents entitled to 52 weeks of parental leave, 32 of which will be paid by the state. The Danish labor market model, called the flexicurity model, also provides flexibility for employers and security for workers, while emphasizing active labor participation. This allows both workers and the state to provide a safety net in times of unemployment.

Therefore, many people are quite satisfied with paying taxes, especially if the public services they actually receive are of high quality.

However, this also comes with some disadvantages, as Denmark has to provide these educational grants to students from other European Union countries, even though they rarely stay in the country for long periods of time.

In Austria, the social security system supports high taxes.

Austria, which also has a high tax rate of 55%, places great emphasis on social insurance systems such as the statutory health insurance system, the statutory pension insurance system, and the statutory workers’ compensation system. In addition, childbirth and unemployment are also covered.

The state requires all employees to have insurance, as well as those receiving unemployment benefits, pensions, or other need-based funds.

In countries such as Belgium, single people without children bear the brunt of the highest taxes, while married couples with children pay slightly less.

The country is proud of its high-quality healthcare, but registration can be a long and complicated process, as it includes registration with social security funds and public health insurance funds.

Belgian taxpayers have around 65% of their wages withheld

You must also pay monthly social insurance premiums. Therefore, if a person lives in Belgium and his salary is 45,000 euros, he will be subject to 50% tax on amounts exceeding 42,370 euros. In addition, the employee must pay 13.07% as social security contributions.

Special social security contributions must also be paid, which vary between €9.30 and €60.94 per month. Therefore, someone receiving this salary would have a take-home pay of approximately 1,369 euros per month, or approximately 36% of their salary.

Keeping in mind that the minimum wage in Belgium is 1,994.18 euros per month before tax, a salary of 45,000 euros per month means that a resident’s take-home pay is significantly less than the minimum wage.

This has led to growing dissatisfaction in recent years, with Belgians feeling that they are not getting enough for their taxes compared to Scandinavian countries.

However, according to the OECD, Belgium is working to gradually lower wage taxes, with the average single worker’s taxes falling by around 2.7% between 2009 and 2022.

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The Swedish Tax Agency is one of the most trusted in the country

Like Denmark, Swedish citizens don’t mind paying fairly high taxes, in this case around 52.3%, for a well-functioning society and quality public services. The Swedish Tax Agency Skatteverket is one of the most trusted and respected authorities in the country, after the Swedish Patent and Registration Office (PRV) and the Property Office Lantmateriet.

This is because the tax office is involved in most aspects of people’s lives, including births, marriages, real estate moves, and deaths, and strives to ensure that high-quality services are provided. Not only that, but they are also very customer-friendly and accessible, which makes them even more trusted.

Low taxes in Eastern European countries increase investment opportunities

For Eastern and Southeastern European countries with still developing infrastructure and economies, such as Romania, Bulgaria and Bosnia and Herzegovina, tax cuts are a way to attract and hopefully retain foreign investment.

These countries often offer cheaper labor and production costs, reduced taxes, and abundant untapped markets and opportunities. Not only that, but the cost of living is significantly lower than most Western European countries, so they can often offer a better standard of living.

Not only that, Southern and Eastern Europe also has the fastest growing economies, with Bulgaria, North Macedonia, Romania and Cyprus all being considered as the next growth spots for several companies and industries. .

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But in recent months, countries such as Romania have attempted to increase taxes on software sector employees. The government is also eliminating health insurance exemptions for employees in the construction, food and agriculture sectors to increase tax revenue.

Higher salaries often offset tax burdens

In some cases, average salary Countries with high tax rates, such as Denmark and Austria, have even more income, which goes a long way toward relieving some of the fiscal pressure. According to Eurostat, the average salary in Denmark in 2022 was approximately 62,972.33 euros and in Austria it was 68,690.65 euros.

This is because, for example, Denmark’s flexible working model allows for more open wage negotiations, as well as a greater emphasis on education and lifelong learning. In some countries, demand is increasing in high-income sectors such as finance, banking, law, and healthcare.

Tax burden may increase due to rising inflation

Inflation is another factor that can make your tax burden potentially heavy. This is especially true after the Russo-Ukrainian war, which has caused energy and food prices to soar over the past few years. The Red Sea turmoil, coupled with other conflicts such as the Israel-Hamas war, is further accelerating the rise in energy and other benign prices.

If this trend continues, rising consumer prices will also put pressure on people’s wallets, making it even more difficult to raise taxes.

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Eurozone inflation fell to a two-year low of 2.8% in January, but the European Central Bank (ECB) remains cautious and optimistic about its data-driven approach before making decisions on rate cuts. Maintained.