In most European countries, higher incomes are taxed at increased rates. However, the top income tax rates vary significantly, clearly dividing Northwestern Europe and the east of the continent.
Tax fairness is important for any society: it shows whether people pay taxes in proportion to their income and wealth. Most European countries have a progressive system: the more you earn, the higher the tax burden.
According to the Tax Foundation, as of 2026, the marginal personal income tax rates range from 10% in Bulgaria and Romania to 60.5% in Denmark.
In addition to Denmark, marginal income tax rates exceed 50% in six other countries: France, Austria, Spain, Belgium, Portugal, and Sweden.
Rates close to this level also apply to the highest incomes in Slovenia and the Netherlands.
Average Level in Europe
The average maximum income tax rate in 35 European countries is 38.5%. Among European OECD members, it rises to 43.4%. In 18 countries, the rate exceeds 40%. In Latvia, it is 36%.
In nine countries, the top rate ranges from 40% to 48%: these are Ireland, Germany, Italy, Iceland, Luxembourg, Finland, the United Kingdom, Greece, and Turkey.
In the five largest economies in Europe, the top rate varies from 45% in the United Kingdom to 55.4% in France. The gap is quite noticeable, about 10 percentage points.
For comparison: aside from Bulgaria and Romania, the maximum income tax rate is below 25% in Moldova, Hungary, Ukraine, Georgia, the Czech Republic, and Estonia.
Strong Regional Disparity: Northwestern and Eastern Europe
Marginal income tax rates vividly demonstrate regional differences. Overall, the highest maximum rates, typically from 45% to 60%, are set in Northern and Western European countries. There are exceptions, such as Norway, where the rate is slightly below 40%.
In most Eastern European economies outside the EU, the top rates remain lower, although Turkey stands out with a level of around 41%, bringing it closer to the intermediate tax regimes of EU countries. In Central and Eastern Europe, including the Balkans, lower rates generally apply as well. In some countries, maintaining relatively low maximum rates is aided by a flat income tax scale.
Tax Rates Change Following Political Decisions
These rates are not permanent: governments adjust them according to changes in tax policy. According to the Tax Foundation, over the past year, several countries have revised their maximum personal income tax rates.
"Overall, governments can more effectively replenish the budget by maneuvering marginal rates at the lower end of the income scale than by raising maximum rates," said Alex Mengden, a global policy analyst at the Tax Foundation, in his article.
"This is because raising the rate for one tax category worsens the incentives to earn more or less only for people in that category, but at the same time brings in additional revenue from all taxpayers in higher categories," he added.
Denmark introduced a new income tax category for incomes over 2.8 million Danish kroner (375,000 euros), increasing the maximum rate from 55.6% to 60.5%.
Estonia raised its flat income tax rate from 22% to 24%, while Slovakia introduced two new tax categories, increasing the top rate from 25% to 35%.
In contrast, Finland lowered its maximum income tax rate from 51.5% to 45%.
In 2025, only one in five EU residents believed that taxes are paid proportionally to income and wealth "to a significant extent." About half (51%) agreed with this "to some extent," according to a Eurobarometer study.
