Taxation is the main source of a country’s finances, and national finances are the basic economic guarantee for fulfilling public management functions. Therefore, for any political power, taxation is a necessary right; and for the citizens of a country, paying taxes has naturally become an obligation. Among the many types of taxes, personal income tax is one of the most common. Except for a few dozen countries like Brunei and Saudi Arabia that do not tax their nationals' personal income, other countries around the world have levied taxes. Of course, in this area, how much tax to collect is not a simple question. If you collect too much, the disposable income in the hands of the people will be insufficient, which will affect consumption, and thus production and investment; if you collect too little, the government deficit will be too high, which is not conducive to the construction and management of public facilities, and is not conducive to the normal operation of management functions. , which is also not conducive to secondary wealth distribution and adjustment of the gap between rich and poor. So, for European countries with relatively developed economies and high levels of national income, how do they set the personal income tax rate? Is it like some netizens say, using high taxes to maintain a high level of social welfare? This article is about Let me share with you the five countries with the highest personal income tax in Europe. Since in European countries, single people and people with families with children have different rates for paying personal income tax, so we can only introduce them separately. It should be noted that due to the outbreak of the COVID-19 epidemic in 2020, many European countries have temporarily adjusted tax rates or introduced temporary tax reduction and exemption measures. For countries with such measures, we have adopted the tax rates before adjustment. Let’s first look at the personal income tax rates for single people. 1. Denmark Denmark implements a progressive tax rate with an upper limit of 55.9. Residents are taxed on worldwide income, and sources of taxable income include employment income, bonuses, fringe benefits, business income, expenses, pensions, annuities, Social Security benefits, dividends, interest, capital gains and real estate rental income. Other income taxes: capital gains tax of 27 or 42, and a withholding tax of 22 on royalties. Pensions, unemployment insurance, debt interest, charitable donations, unreimbursed business travel expenses, etc. can be included in the offset against the taxable amount. 2. Slovenia The personal income tax rate in Slovenia ranges from 16 to 50. Residents are taxed on their worldwide income, while non-residents are taxed only on their Slovenian-source income. Sources of taxable income include employment, business, agriculture and forestry, rents and royalties, dividends, interest and capital gains and other income. The capital gains tax rate is 27.5. If the relevant assets are held for more than 5 years, the tax rate is reduced to 20, and the tax rate is further reduced by 5 for every additional 5 years. If the assets are held for more than 20 years, they are tax-free. It should be noted that if the capital gains obtained from holding derivatives within one year are subject to a tax rate of 40%. 3. Belgium Belgium also implements a progressive tax rate with an upper limit of 50. Sources of taxable income include income from personal property, employment, investments and other sources. Capital gains tax rates depend on the type of capital, with a maximum rate of 30. Social security and alimony payments can be applied to be deducted from the tax payable. 4. Germany Germany implements a progressive tax rate (that is, the higher the income, the higher the corresponding tax rate). The starting point is 9,408 euros and the upper limit of the tax rate is 45. Sources of taxable income include farming, forestry, business ownership, self-employment, employment, savings and investments, rental properties, capital gains and other income. Other special provisions: A. A 25% withholding tax is levied on interest and dividends, and a 15% withholding tax is levied on royalties (such as patent or copyright income). The tax exemption on savings and investment income is €801. B. Members of some churches need to pay a church tax of 8 or 9, and they can apply for tax exemption under special circumstances - for example, as long as church members pay a certain percentage of their income to the church to which they belong, the tax can be deducted. C. Other circumstances in which the taxable amount may be deducted: statutory pension insurance plans, health insurance premiums, private accident, life, unemployment and disability insurance premiums, donations to registered charities and future vocational training expenses up to 6,000 euros per year.
5. Lithuania Although Lithuania also has a progressive tax rate, there are not many levels, and the highest tax rate is only 32. Sources of taxable income include employment, business activities, royalties, leased property and others. Income not related to employment - including royalties, capital investment gains, interest and gains from the sale of property - is taxed at a rate of 15 or 20. Looking at married people and people with children, the European countries with the highest personal income tax rates are the following 5: 1. Denmark. Danish married family spouses must file taxes separately. The tax rate is similar to that of single people, but there will be a tax exemption of 46,200 kronor, and Capital gains from home sales are also generally tax-free, and inheritance tax is not payable by a spouse. 2. Netherlands The Netherlands classifies all income of married persons into one of the following three categories: 1) wages, wages, benefits in kind, pensions and home ownership income; 2) corporate income from large business holdings; 3) savings and investment income. Each category has its own deductions and tax rates, and a general tax credit applies to net income when the three categories are combined. Family income tax is subject to progressive tax rates, ranging from 37.35 to 49.5. Married couples must file together unless they have filed for divorce. Some unmarried couples (those who have children are considered unmarried) must also file together. 3. Finland Finland imposes progressive tax rates on married families, with the highest tax rate being 31.25. One of the special things about Finland is that there is no way to deduct the taxable amount, which results in the actual amount of tax paid being higher than in other countries. 4. Lithuania is basically the same as single people. The difference is that income tax is paid as a family unit. If you are married with two children or more, you can enjoy 4,200 euros to 31,990 euros per year. This tax exemption increases with your income. And decreasing. In other words, the lower the income, the higher the tax exemption amount available. 5. Turkey From a geographical point of view, Turkey should be regarded as an Asian country, but it prefers to regard itself as a European country, and many statistical agencies also classify it as a European country. Originally, Turkey's personal income tax rate (15 to 30) was not too high, but because it treated singles and marrieds equally, the personal income tax of married families immediately entered the top five. In Turkey, medical and educational expenses, pension and private health insurance expenses, and certain donations are tax deductible.