Low Tax Countries in Europe: Where To Pay the Least in 2026

While Europe is often portrayed as a single bloc of countries with some regional differences, in reality, it’s much more diverse across most aspects.

Taxation is one of the clearest examples. The top marginal income tax rate varies by 60 percentage points across the continent, and understanding exactly where each country falls within that range is the crucial first step in choosing where to base yourself. 

In this article, we’ll examine the low-tax countries in Europe primarily based on their standard income and corporate tax rates. We’ll also include information on the fastest way to secure residence in those countries.

Monaco: The Lowest Income Tax in Europe 

As the only country in Europe that could be considered a genuine tax haven, Monaco levies no direct taxation on individuals, with a zero-tax policy on:

• Income (including investment income)
• Dividends
• Capital gains 

The exception to this policy is French citizens, who are still liable for French income tax even if they are Monegasque residents.

Monaco also doesn’t have a wealth or property tax or any council taxes. The country does impose an inheritance tax that applies to property with Monegasque situs, with rates ranging from 0% to 16%, depending on the relationship between the deceased and their heir: 

Relationship	Tax Rate
Spouses, parents, and children	0%
Brothers and sisters	8%
Uncles, aunts, nephews, nieces	10%
Other familial relationships	13%
Non-related	16%

Monaco can also be counted as a tax-free country for corporate income in specific circumstances, as it only levies a 25% corporate income tax on two types of companies: 

1. Any commercial or industrial company that generates at least 25% of its turnover outside of Monaco
2. Any company that generates income through sales, licensing, or royalties from intellectual property 

If you want to become a resident of Monaco, you generally have to meet the country’s accommodation and sufficient funds requirements. 

Ownership, renting, and staying with family can be sufficient to satisfy the accommodation criteria. You should note that, due to a limited supply, real estate prices in Monaco are particularly high. 

As for sufficient funds, applicants can demonstrate financial means by depositing the required amount in a Monaco bank. Salary and other types of income, savings, pensions, and support from family members may also be taken into account. It’s important to note, however, that Monaco doesn’t officially publish a threshold you have to meet.

8 Low-Tax Countries in Europe Ranked

If Monaco is not a suitable option, the following eight countries have some of the lowest taxes in Europe:

1. Andorra
2. Bulgaria
3. Romania
4. Moldova
5. Hungary
6. Montenegro
7. Liechtenstein
8. Georgia

Andorra

Located in the Pyrenees mountains between France and Spain, Andorra is one of the countries with the lowest tax rates in Europe for individuals and businesses. It has a progressive personal income tax with a generous personal exemption, and a top marginal tax rate of 10%: 

Income	Personal Income Tax Rate
Under EUR 24,000 (USD 27,450)	0% (personal exemption)
EUR 24,000–EUR 40,000 (USD 27,450–USD 45,750)	5%
Over EUR 40,000 (USD 45,750)	10%

For income from movable capital (dividends, interest, capital gains), the annual exemption is EUR 3,000 (USD 3,400), and the maximum tax rate is generally 10%. However, Andorra also offers exemptions that can make dividends and the sale of shares tax-free under certain circumstances. 

Non-tax residents of Andorra are liable for a 10% personal income tax on their Andorra-sourced income, with the exception of dividends from Andorran companies, which aren’t subject to taxation. 

Corporate income tax in Andorra is also 10%, with local collective investment entities not being subject to corporate income taxation. 

To become a resident of Andorra, you can apply for a residence permit without gainful activity (passive residence), which doesn’t require you to have employment in the country but does require a EUR 1 million (USD 1.15 million) investment in one of the following vehicles:

• Real estate in Andorra
• Equity or shares in a company resident in Andorra
• Debt or other financial instruments issued by companies resident in Andorra
• Government bonds
• Life insurance with local insurers

Another option is to invest EUR 400,000 (USD 458,000) in the country’s housing fund. Andorra also maintains residency programs for entrepreneurs and digital nomads.

Bulgaria

Eastern European countries have some of the lowest tax rates on the continent. Bulgaria has a straightforward tax system with a flat 10% tax rate on: 

• Personal income
• Corporate income
• Capital gains

As with most systems, some exceptions may apply. For example, the capital gains from the disposal of a single residential property in a tax year aren’t subject to taxation if the seller held the property for at least three years. 

The exceptions can also increase the tax burden. For example, businesses that organize gambling games might be subject to a 15% alternative tax, depending on how the games are run and charged for. 

Bulgaria used to offer real estate and government bond investments as a basis for permanent residence, but the variety of investment options has been reduced to: 

Investment Type	Minimum Amount
Shares or bonds on the Bulgarian Stock Exchange	EUR 1.024 million (USD 1.17 million)
Concession rights	EUR 512,000 (USD 585,000)
Exchange-traded fund	EUR 512,000 (USD 585,000)
Alternative investment fund	EUR 512,000 (USD 585,000)
Priority investment project	EUR 1.024 million (USD 1.17 million)
Unlisted company capital	EUR 3.072 million (USD 3.5 million)

Romania

Romania levies a flat 10% personal income tax. Until 2026, this rate applied to most sources of income. However, a tax increase set the new rate at 16% for the following: 

• Dividends
• Capital gains
• Income from virtual currency transfers

The country’s standard corporate income tax rate is 16%, but the country has special tax regimes for specific types of businesses, such as: 

• Nightclubs and gambling operations: 16% of taxable profit or 5% of revenue, whichever is higher
• Qualifying companies with revenue under EUR 100,000 (USD 114,500): 1% of revenue

As an investor in Romania, you can obtain a renewable long-stay permit for business activities, with the initial permit duration determined by the size of the investment or the number of jobs it creates. 

You can also invest EUR 1 million (USD 1.15 million) in the country, or create 100 full-time jobs, and be granted long-term residence without having to meet the usual length-of-stay conditions.

Moldova

Moldova’s personal income tax rate is 12%, and it covers most sources of income, such as: 

• Salaries and other income from employment
• Capital gains
• Individual entrepreneurs’ income

Moldova also levies a final tax at the source for some types of income, such as: 

Type of Income	Tax Rate
Dividends	6%
Gambling revenues	18%
Royalties	12%

The corporate income tax rate is also 12%, except for income from farming enterprises, which is taxed at 7%. Qualifying small and medium companies can opt for a special tax regime that changes the rate to 4% and applies it to their aggregated income for accounting purposes.

You can obtain temporary residence in Moldova as an investor, as long as the investment fulfills one of two conditions: 

1. It’s equal to or greater than 30 average monthly salaries in Moldova
2. It has resulted in the creation of at least one full-time job with a salary equal to or greater than the average salary in the country

Hungary

Hungary’s personal income tax is levied at a 15% rate. In addition to employment, the sources of income subject to the tax include:

• Rental income (after deductions)
• Income from crypto trading
• Capital gains, interest, dividends

The country’s tax code also allows some exemptions. For example, interest from investments held for at least three years is taxed at 10%, while interest from investments held for at least five years is not taxed at all.

Hungary’s corporate income tax rate is the lowest in Europe at 9%. However, companies are subject to further municipal-level income taxation through the local business tax. The rates vary between municipalities but cannot exceed 2%. 

Hungary offers a variety of pathways to residence, including self-employment and digital nomad paths. As an investor, you can become a resident if your investment is of national economic interest. This could be: 

• A EUR 250,000 (USD 286,000) investment in a real estate investment fund
• A EUR 1 million (USD 1.15 million) donation to an institution of higher education in the country

Montenegro

Personal income in Montenegro is subject to a progressive tax with rates ranging from 0% to 15% on the following sources of income:

• Salaries
• Entrepreneurial income
• Income from games of chance

Income from other sources is taxed at a flat 15% rate. 

Montenegro has a progressive corporate income tax system: 

Income	Tax Rate
Up to EUR 100,000 (USD 114,500)	9%
EUR 100,000–EUR 1.5 million (USD 114,500–USD 1.72 million)	12%
Over EUR 1.5 million (USD 1.72 million)	15%

To become a permanent resident of Montenegro, you have to hold a temporary residency permit for at least five years. You can obtain the permit by: 

• Investing at least EUR 150,000 (USD 171,600) in real estate in the country
• Starting a company in Montenegro and hiring yourself to be issued a work permit

Liechtenstein

Liechtenstein imposes a personal income tax at two levels: national and communal. The national personal income tax is progressive, with rates ranging from 1% to 8%. The highest rate applies to income over CHF 211,401 (USD 262,000). 

The communal tax is a 150%–180% surcharge on the national income tax due. Including the communal surcharge, marginal personal income tax rates range from 3.5% for income exceeding CHF 15,855 to 28% for income exceeding CHF 211,400. For married couples, the threshold for the highest tax bracket is doubled to CHF 422,800, while for single parents it’s CHF 317,100.

Personal income from capital gains and dividends is generally exempt from taxation. 

The corporate income tax rate in Liechtenstein is 12.5%. Legal entities are also subject to a corporate minimum tax of CHF 1,800 (USD 2,230). 

You can apply for a permit to take up residence in Liechtenstein without gainful employment if you don’t plan to work in the country and have sufficient means to support yourself. Note that the country doesn’t publish minimum financial requirements, and obtaining residence there is notoriously challenging.

Georgia

Georgia levies a personal income tax at a flat rate of 20%, but there are special tax regimes for solo entrepreneurs: 

Income Threshold	Tax Rate
GEL 30,000 (USD 11,430)	0%
GEL 500,000 (USD 190,500)	1%

Specific sources of income might also be treated differently under the tax code. A 5% tax may apply to capital gains derived from the sale of a vehicle or residential property.

The standard corporate income tax rate in Georgia is 15%. A 20% rate applies to income from financial sector companies, such as: 

• Commercial banks
• Credit unions
• Loan providers
• Microfinance companies

It’s important to note that Georgia only taxes corporate profits when they are distributed. 

Georgia maintains a residency-by-investment program that grants you residency after investing GEL 392,000 (USD 150,000) in the country.

Top Considerations When Choosing a Low-Tax Jurisdiction in Europe

Marginal personal and corporate income tax rates are a good starting point when choosing a European country with low taxes as your base. However, these rates alone won’t give you the full picture of your potential tax burden after moving to your chosen country. 

The factors you should also consider include: 

• Income source alignment: Because countries might have different tax rates for different sources of income (rental, capital gains, investment), you should match your choice of country with your main source of income
• Non-tax charges: In addition to direct and indirect taxes, you can also be liable for non-tax charges such as social security and health insurance contributions, which can vary depending on your legal and employment status in the country
• Special tax regimes: Some European countries have special tax regimes that make them effectively low-tax jurisdictions if you meet certain criteria. Switzerland’s lump sum taxation, for example, can significantly reduce the tax burden for foreign residents
• Exit charges: Your home country might charge you for unrealized capital gains when you decide to take up tax residence somewhere else
• Citizenship-based taxation: If you’re a U.S. citizen, you are taxed on your worldwide income regardless of where you live. While you might be eligible to reduce the tax burden through foreign-earned income relief or get credit for taxes paid abroad, you won’t be fully exempt until you relinquish U.S. citizenship

Keep in mind that, in addition to tax structuring, you must also navigate the process of obtaining residency. A single misstep in that procedure can add to the processing time and overall costs, and delay your access to the tax benefits the relocation should provide. For the most efficient route to a European residency, consider working with an experienced global mobility consultancy, such as Nomad Capitalist.

Choose the Most Tax-Efficient Jurisdiction With Nomad Capitalist

Nomad Capitalist is an advisory firm specializing in cross-border mobility and capital preservation. We’ve assisted more than 1,500 clients in obtaining second residency or citizenship, reducing tax exposure, and placing strategic investments in foreign markets.

Our core service is the Action Plan, a blueprint for achieving your financial and lifestyle goals. When creating the Plan, we start with your current situation and develop a step-by-step strategy for reaching your objectives. 

Here’s what partnering with Nomad Capitalist looks like: 

1. We ask you to fill out a short form to help us determine whether we’re a good match
2. We schedule a 45-minute onboarding call to learn more about your circumstances and desires
3. Our agents create an Action Plan and present it to you for approval
4. We implement the Plan over a year-long period, managing the administrative parts
5. You continue receiving support from us even after the Plan is implemented

If you’re looking to establish a European base, Nomad Capitalist can help you choose the most suitable low-tax jurisdiction for your specific needs. We can also manage the process of securing residency or citizenship in the country you choose, and advise you on structuring and investment strategies to protect and grow your wealth. To get started, contact Nomad Capitalist now!