Daniel Bunn President and CEO at Tax Foundation | Twitter Website
The European landscape of personal income tax rates for 2025 shows significant variation across the continent. Among the OECD countries in Europe, the average statutory top personal income tax rate is 42.8 percent. Denmark leads with a rate of 55.9 percent, followed by France at 55.4 percent and Austria at 55 percent.
Conversely, some European nations apply much lower rates. Hungary imposes a rate of 15 percent, while Estonia and the Czech Republic have rates of 22 percent and 23 percent respectively.
In non-OECD European countries, flat-rate taxation is more common, with Bulgaria and Romania applying a low rate of just 10 percent. Moldova follows with a rate of 12 percent, Ukraine at 19.5 percent, and Georgia at 20 percent.
For context, in the United States as of January 2025, the average combined state and federal top income tax rate stands at approximately 42.14 percent.
Notably, Estonia has increased its flat income tax from last year's rate of 20 to now stand at 22 percent. Latvia also raised its top personal income tax rate from last year’s figure of 31 to reach up to 36 percent this year.
Looking ahead, Austria plans to eliminate its highest tax bracket in the year following next (2026), which will reduce its top income tax rate from its current level back down to an anticipated future figure of about 50 percent. In Germany, there is ongoing judicial review regarding the solidarity surtax that elevates their top personal income tax from an initial base figure up to a slightly higher total percentage point value.
These figures reflect data compiled by various analysts including Alex Mengden and Cristina Enache among others.
