European countries, like many around the world, impose corporate income taxes on business profits. The tax burden depends on both the corporate tax base and the corporate tax rate. "The amount of taxes a business ultimately pays on its profits depends on both the corporate tax base and the corporate tax rate."

Malta currently has the highest statutory corporate income tax rate in Europe at 35 percent, followed by Portugal at 30.5 percent, Germany at 29.9 percent, and Italy at 27.8 percent. On the other hand, Hungary (9 percent), Bulgaria (10 percent), Cyprus (12.5 percent), and Ireland (12.5 percent) have some of the lowest rates.

"The average European countries analyzed currently levy a corporate income tax rate of 21.5 percent," which is below the global average of 23.5 percent as recorded across 181 jurisdictions in 2024. For comparison, "the United States levies an average corporate income tax rate of 25.6 percent."

Over recent decades, European nations have seen a reduction in these rates; however, this decline has stabilized recently.

Several changes to statutory rates occurred in 2025: Czechia increased its rate from 19 to 21 percent; Estonia's rose from 20 to 22 percent effective January; Iceland's moved from 20 to 21 percent; Lithuania adjusted from 15 to 16 percent starting January; Slovenia went from 19 to 22 percent; while Portugal reduced its rate from 31.5 to 30.5 percent.